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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-A/A
(AMENDMENT NO. 1)
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) or 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
GENZYME CORPORATION
(Exact name of Registrant as Specified in its Charter)
MASSACHUSETTS 06-1047163
(State of Incorporation or Organization) (I.R.S. Employer Identification No.)
ONE KENDALL SQUARE, CAMBRIDGE, MASSACHUSETTS 02139
(Address of Principal Executive Offices) (Zip Code)
If this Form relates to the registration of a class of securities pursuant to
Section 12(b) of the Exchange Act and is effective upon filing pursuant to
General Instruction A.(c), please check the following box. [_]
If this Form relates to the registration of a class of securities pursuant to
Section 12(g) of the Exchange Act and is effective pursuant to General
Instruction A.(d), please check the following box. [X]
Securities Act registration statement file number to which this form
relates:_____________________________________
(If applicable)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
NONE NONE
Securities to be registered pursuant to Section 12(g) of the Act:
GGD STOCK PURCHASE RIGHTS
GTR STOCK PURCHASE RIGHTS
GMO STOCK PURCHASE RIGHTS
(Title of Class)
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
The Registration Statement on Form 8-A (the "Registration Statement") filed by
Genzyme Corporation (the "Company") on March 25, 1999 is hereby amended by
deleting in their entirety Items 1 and 2 of the Registration Statement and
replacing such items with the following:
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
Pursuant to the Amended and Restated Renewed Rights Agreement (the
"Agreement") dated as of June 10, 1999 between Genzyme Corporation and American
Stock Transfer & Trust Company, as Rights Agent, each outstanding share of
Genzyme General Division Common Stock (the "GENZ Stock"), Genzyme Tissue Repair
Division Common Stock (the "GZTR Stock"), Genzyme Molecular Oncology Division
Common Stock (the "GZMO Stock") and Genzyme Surgical Products Division Common
Stock (the "GZSP Stock," and all such series of Genzyme's Common Stock being
referred to herein, collectively, as the "Common Stock") also represents one GGD
Stock Purchase Right, one GTR Stock Purchase Right, one GMO Stock Purchase Right
and one GSP Stock Purchase Right, respectively (each a "Right"). Each Right
will, upon becoming exercisable, entitle the holder to buy one newly-issued
share of Genzyme's (i) Series A Junior Participating Preferred Stock, par value
$.01 per share, for each share of GENZ Stock, at an exercise price of $300, (ii)
Series B Junior Participating Preferred Stock, par value $.01 per share, for
each share of GZTR Stock, at an exercise price of $26, (iii) Series C Junior
Participating Preferred Stock, par value $0.01 per share, for each share of GZMO
Stock, at an exercise price of $26 and (iv) Series D Junior Participating
Preferred Stock, par value $0.01 per share, for each share of GZSP Stock, at an
exercise price of $150 (all such series of Junior Participating Preferred Stock
being referred to herein, collectively, as "Preferred Stock," and each series'
exercise price being referred to herein, as its "Purchase Price"). The
description and terms of the Rights are set forth in the Agreement.
The Rights will be evidenced, with respect to any certificate of any
series of Common Stock outstanding prior to the Distribution Date (as defined
below), by those Common Stock certificates and no separate certificates for the
Rights will be issued. The Rights will only be transferable with the Common
Stock, and a transfer of Common Stock will also constitute a transfer of the
corresponding Rights.
Genzyme will mail separate certificates for the Rights ("Right
Certificates") upon the earlier of (i) the tenth day (or such later date as the
Board of Directors of Genzyme (the "Board") may determine) following Genzyme's
public announcement that a person or group has acquired 15% or more of the
combined voting power of all series of Genzyme's outstanding Common Stock (such
person or group being hereinafter referred to as an "Acquiring Person") or (ii)
the tenth business day (or such later date as the Board may determine) after any
person or group commences a tender or exchange offer which would, if completed,
result in the offeror owning 15% or more of the combined voting power of all
series of Genzyme's outstanding Common Stock. The earlier of the dates described
in (i) and (ii) above is called the "Distribution Date." The Rights cannot be
exercised until the Distribution Date. Until a Right is exercised, holding a
Right will not confer rights as a stockholder of Genzyme, such as the right to
vote or to receive dividends. The Rights expire on March 28, 2009.
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The Rights may generally be redeemed by action of the Board at $0.001
per Right at any time prior to the tenth day (or such later date as the Board
may determine) following Genzyme's public announcement that an Acquiring Person
has become such. The Rights may also be redeemed, following the above-cited
public announcement, in connection with certain mergers and other transactions
between Genzyme and a person who is not an Acquiring Person.
Preferred Stock purchasable upon exercise of the Rights will not be
redeemable. Each share of Preferred Stock will be entitled to a minimum
preferential quarterly dividend payment of $1 per share, but will be entitled to
an aggregate dividend of 100 times the dividend declared per share of the
corresponding series of Common Stock. In the event of liquidation, the holders
of the Preferred Stock will be entitled to an aggregate payment of 100 times the
payment made per share of the corresponding series of Common Stock. Each share
of Preferred Stock will have 100 votes, and will vote together with the Common
Stock. In the event of any merger, consolidation or other transaction in which
Common Stock is exchanged, each share of Preferred Stock will be entitled to
receive 100 times the amount received per share of the corresponding series of
Common Stock.
The value of the one one-hundredth interest in a share of Preferred
Stock purchasable upon exercise of each Right should approximate the value of
one share of the corresponding series of Common Stock because of the nature of
the Preferred Stocks' dividend, liquidation and voting rights.
To preserve the economic value of the Rights, in the event of any stock
dividends, stock splits, recapitalizations, reclassifications or other similar
changes in capitalization, then the number of shares of Preferred Stock (or the
number and kind of other securities) issuable upon exercise of each Right, the
Purchase Price and redemption price in effect at such time (including the number
of Rights or fractional Rights associated with each share of Common Stock) shall
be adjusted as deemed appropriate by the Board. With certain exceptions, no
adjustment in the Purchase Price will be required until cumulative adjustments
require an adjustment of at least 1% in the Purchase Price. No fractional shares
of Preferred Stock will be issued (other than fractions which are integral
multiples of one one-hundredth of a share of Preferred Stock); instead, an
adjustment in cash will be made based on the average closing price of the
Preferred Stock (or if not ascertainable, the market price of the underlying
Common Stock) over the last ten trading days before the date of exercise.
Upon an Acquiring Person becoming such, each holder of Rights, other
than an Acquiring Person, will thereafter have the right to purchase a number of
shares of a series of Genzyme's Common Stock having a value equal to two times
the exercise price of the corresponding Right. Genzyme also has the right, in
such circumstances, to mandatorily exchange the Rights for such shares of Common
Stock.
Alternatively, if Genzyme is involved in a merger or other business
combination in which Genzyme is not the surviving corporation at any time when
any person owns 15% or more of the voting power of Genzyme's outstanding Common
Stock, the Rights will entitle a holder to buy shares of common stock of the
acquiring company having a market value of two times the Purchase Price of each
Right.
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Prior to the Distribution Date, the Board may amend any terms of the
Rights without the consent of holders of certificates representing Common
Shares, including holders of the Rights. From and after the Distribution Date,
the Agreement may be amended without the approval of any holders of Rights only
to (i) cure ambiguities, (ii) correct defective provisions, (iii) extend the
redemption period for the rights, or (iv) change provisions as the Board deems
necessary, but that will not adversely affect the interests of holders of the
Rights. Under no circumstances, however, can the Agreement be amended to extend
the redemption period after that period has expired.
The Rights have certain anti-takeover effects. The Rights can cause
substantial dilution to a person or group that attempts to acquire Genzyme on
terms that are not approved by the Board. The Rights should not interfere with
any merger or other business combination that is approved by the Board because
the Rights may be redeemed by Genzyme prior to the time that the Rights have
become exercisable.
The Agreement specifying the terms of the Rights and the certificate of
designations setting forth the terms of the Preferred Stock are attached to this
Registration Statement as exhibits and are incorporated herein by reference. The
foregoing description of the Rights is qualified in its entirety by reference to
these exhibits.
ITEM 2. EXHIBITS.
1. Restated Articles of Organization of the Registrant. Filed as
Exhibit 1 to the Registrant's Registration Statement on Form
8-A filed with the Commission on June 18, 1997, and
incorporated herein by reference.
2. Series Designation for the Series A, Series B, Series C and
Series D Junior Participating Preferred Stock of the
Registrant. Filed herewith.
3. By-Laws of the Registrant. Filed as Exhibit 3.2 to the
Registrant's Current Report on Form 8-K dated December 31,
1991 (File No. 0-14680), and incorporated herein by reference.
4. Amended and Restated Renewed Rights Agreement dated as of June
10, 1999 between the Registrant and American Stock Transfer &
Trust Company. Filed herewith.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
GENZYME CORPORATION
Date: June 11, 1999 By: /s/ Michael S. Wyzga
-----------------------------
Name: Michael S. Wyzga
Title: Senior Vice President, Finance
and Chief Financial Officer
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EXHIBIT NO. DESCRIPTION
1. Restated Articles of Organization of the Registrant. Filed as
Exhibit 1 to the Registrant's Registration Statement on Form
8-A filed with the Commission on June 18, 1997, and
incorporated herein by reference.
2. Series Designation for the Series A, Series B, Series C and
Series D Junior Participating Preferred Stock of the
Registrant. Filed herewith.
3. By-Laws of the Registrant. Filed as Exhibit 3.2 to the
Registrant's Current Report on Form 8-K dated December 31,
1991 (File No. 0-14680), and incorporated herein by reference.
4. Amended and Restated Renewed Rights Agreement dated as of June
10, 1999 between the Registrant and American Stock Transfer &
Trust Company. Filed herewith.
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EXHIBIT 2
The Commonwealth of Massachusetts
William Francis Galvin
Secretary of the Commonwealth
FEDERAL IDENTIFICATION
NO. 06-1047163
ONE ASHBURTON PLACE, BOSTON, MASS. 02108
CERTIFICATE OF VOTE OF DIRECTORS ESTABLISHING
A SERIES OF A CLASS OF STOCK
General Laws, Chapter 156B, Section 26
----------------
We, Michael Wyzga, Senior Vice President and
Peter Wirth, Clerk of
Genzyme Corporation
located at One Kendall Square, Cambridge, MA 02139 do hereby certify that at a
meeting of the directors of the corporation held on May 26, 1999, the following
vote establishing and designating a series of a class of stock and determining
the relative rights and preferences thereof was duly adopted:
See attached continuation sheets.
NOTE: Votes for which the space provided above is not sufficient
should be set out on continuation sheets to be numbered 2A,
2B, etc. Continuation sheets must have a left-hand margin 1
inch wide for binding and shall be 8 1/2" x 11". Only one side
should be used.
Exhibit 2 - page 1
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TERMS OF THE
SERIES A, SERIES B, SERIES C AND SERIES D
JUNIOR PARTICIPATING PREFERRED STOCK
OF GENZYME CORPORATION
VOTED, that pursuant to paragraph IV.F.1 of this Corporation's Articles
of Organization, the Board of Directors hereby establishes four series of
Preferred Stock of the Corporation with the following designations, powers,
preferences and rights:
A. Authorized Amounts and Designations. Two million shares of
Preferred Stock of the Corporation are designated as Series A Junior
Participating Preferred Stock (the "Series A Preferred Stock"), 400,000 shares
of Preferred Stock are designated as Series B Junior Participating Preferred
Stock (the "Series B Preferred Stock"), 400,000 shares of Preferred Stock are
designated as Series C Junior Participating Preferred Stock (the "Series C
Preferred Stock,") and 600,000 shares of Preferred Stock are designated as
Series D Junior Preferred Stock (the "Series D Preferred Stock" and, together
with the Series A Preferred Stock, the Series B Preferred Stock, the Series C
Preferred Stock and any other series of Preferred Stock so designated by the
Corporation's Board of Directors, the "Junior Preferred Stock"). To the extent
legally permitted, such numbers of shares may be increased or decreased by vote
of the Board of Directors, provided that no decrease shall reduce the number of
shares of Junior Preferred Stock of any series to a number less than the number
of shares of such series then outstanding plus the number of shares of such
series reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Corporation convertible into such series of Junior Preferred Stock.
B. Series A Preferred Stock. A description of the Series A
Preferred Stock and a statement of its preferences, voting powers,
qualifications and special or relative rights or privileges is as follows:
1. Dividends and Distributions.
a. Subject to the prior and superior rights of
the holders of any shares of any series of Preferred Stock ranking prior and
superior to the Series A Preferred Stock with respect to dividends, the holders
of shares of Series A Preferred Stock, in preference to the holders of all
shares of common stock of the Corporation (the "Common Shares"), and of any
other junior stock, shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the first day of March, June, September and
December in each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of Series A Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $1.00 or (b) subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all cash dividends, and 100
times the aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions, other than a dividend on shares of Genzyme General
Division Common Stock (the "GGD Stock") payable in shares of GGD Stock or a
subdivision of the outstanding shares of GGD Stock (by reclassification or
otherwise), declared on the GGD Stock
Exhibit 2 - page 2
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since the immediately preceding Quarterly Dividend Payment Date or, with respect
to the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred Stock. In the event the
Corporation shall at any time after June 12, 1997 declare or pay any dividend on
shares of GGD Stock payable in shares of GGD Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of GGD Stock (by
reclassification or otherwise than by payment of a dividend in shares of GGD
Stock) into a greater or lesser number of shares of GGD Stock, then in each such
case the amount to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of GGD Stock outstanding immediately
after such event and the denominator of which is the number of shares of GGD
Stock that were outstanding immediately prior to such event.
b. The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in paragraph a. of this
Section B.1 immediately after it declares a dividend or distribution on any
shares of GGD Stock (other than a dividend payable in shares of GGD Stock),
provided that, in the event no dividend or distribution shall have been declared
on the GGD Stock during the period between any Quarterly Dividend Payment Date
and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
c. Dividends shall begin to accrue and be
cumulative on outstanding shares of Series A Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series A Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the date
fixed for the payment thereof.
2. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
a. Subject to the provision for adjustment
hereinafter set forth, each share of Series A Preferred Stock shall entitle the
holder thereof to 100 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at any time
after June 12, 1997 declare or pay any dividend on any shares of GGD Stock
payable in shares of GGD Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of GGD Stock (by reclassification or
otherwise than by payment of a dividend in shares of
Exhibit 2 - page 3
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GGD Stock) into a greater or lesser number of shares of GGD Stock, then in each
such case the number of votes per share to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event shall be adjusted
by multiplying such number by a fraction, the numerator of which is the number
of shares of GGD Stock outstanding immediately after such event and the
denominator of which is the number of shares of GGD Stock that were outstanding
immediately prior to such event.
b. Except as otherwise provided herein, in the
Articles of Organization, in any other vote of the Board of Directors of the
Corporation creating a series of Preferred Stock, or by law, the holders of
shares of Series A Preferred Stock and the holders of Common Shares and any
other capital stock of the Corporation having general voting rights shall vote
together as one series on all matters submitted to a vote of stockholders of the
Corporation.
c. Except as set forth herein or as otherwise
provided by law, holders of Series A Preferred Stock shall have no voting
rights.
3. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series A
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
GGD Stock, or (2) to the holders of shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up) with the Series
A Preferred Stock, except distributions made ratably on the Series A Preferred
Stock and all other such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time after
June 12, 1997 declare or pay any dividend on shares of GGD Stock payable in
shares of GGD Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of GGD Stock (by reclassification or otherwise than by
payment of a dividend in shares of GGD Stock) into a greater or lesser number of
shares of GGD Stock, then in each such case the aggregate amount to which
holders of shares of Series A Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of GGD Stock outstanding immediately after such event and the
denominator of which is the number of shares of GGD Stock that were outstanding
immediately prior to such event.
4. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which Common Shares are exchanged for or changed into other stock or securities,
cash and/or any other property, then in any such case each share of Series A
Preferred Stock shall at the same time be similarly exchanged or changed into an
amount per share (subject to the provision for adjustment hereinafter set forth)
equal to 100 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for which
each share of GGD Stock is
Exhibit 2 - page 4
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changed or exchanged. In the event the Corporation shall at any time after June
12, 1997 declare or pay any dividend on any shares of GGD Stock payable in
shares of GGD Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of GGD Stock (by reclassification or otherwise than by
payment of a dividend in shares of GGD Stock) into a greater or lesser number of
shares of GGD Stock, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of Series A
Preferred Stock shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of GGD Stock outstanding immediately
after such event and the denominator of which is the number of shares of GGD
Stock that were outstanding immediately prior to such event.
C. Series B Preferred Stock. A description of the Series B
Preferred Stock and a statement of its preferences, voting powers,
qualifications and special or relative rights or privileges is as follows:
1. Dividends and Distributions.
a. Subject to the prior and superior rights of
the holders of any shares of any series of Preferred Stock ranking prior and
superior to the Series B Preferred Stock with respect to dividends, the holders
of shares of Series B Preferred Stock, in preference to the holders of all
Common Shares, and of any other junior stock, shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the first day
of March, June, September and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series B Preferred Stock, in an amount per share (rounded
to the nearest cent) equal to the greater of (a) $1.00 or (b) subject to the
provision for adjustment hereinafter set forth, 100 times the aggregate per
share amount of all cash dividends, and 100 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions, other than a
dividend on shares of Genzyme Tissue Repair Division Common Stock (the "GTR
Stock") payable in shares of GTR Stock or a subdivision of the outstanding
shares of GTR Stock (by reclassification or otherwise), declared on the GTR
Stock since the immediately preceding Quarterly Dividend Payment Date or, with
respect to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series B Preferred Stock. In the event
the Corporation shall at any time after June 12, 1997 declare or pay any
dividend on any shares of GTR Stock payable in shares of GTR Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of GTR
Stock (by reclassification or otherwise than by payment of a dividend in shares
of GTR Stock) into a greater or lesser number of shares of GTR Stock, then in
each such case the amount to which holders of shares of Series B Preferred Stock
were entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of GTR Stock outstanding immediately
after such event and the denominator of which is the number of shares of GTR
Stock that were outstanding immediately prior to such event.
b. The Corporation shall declare a dividend or
distribution on the Series B Preferred Stock as provided in paragraph a. of this
Section C.1 immediately after it declares a dividend or distribution on any
shares of GTR Stock (other than a dividend payable in
Exhibit 2 - page 5
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shares of GTR Stock), provided that, in the event no dividend or distribution
shall have been declared on the GTR Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $1.00 per share on the Series B Preferred Stock
shall nevertheless be payable on such subsequent Quarterly Dividend Payment
Date.
c. Dividends shall begin to accrue and be
cumulative on outstanding shares of Series B Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series B Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series B Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series B Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the date
fixed for the payment thereof.
2. Voting Rights. The holders of shares of Series B
Preferred Stock shall have the following voting rights:
a. Subject to the provision for adjustment
hereinafter set forth, each share of Series B Preferred Stock shall entitle the
holder thereof to 100 times the number of votes to which the holder of each
outstanding share of GTR Stock is then entitled on all matters submitted to a
vote of the stockholders of the Corporation. In the event the Corporation shall
at any time after June 12, 1997 declare or pay any dividend on shares of GTR
Stock payable in shares of GTR Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of GTR Stock (by reclassification or
otherwise than by payment of a dividend in shares of GTR Stock) into a greater
or lesser number of shares of GTR Stock, then in each such case the number of
votes per share to which holders of shares of Series B Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares of GTR
Stock outstanding immediately after such event and the denominator of which is
the number of shares of GTR Stock that were outstanding immediately prior to
such event.
b. Except as otherwise provided herein, in the
Articles of Organization, in any other vote of the Board of Directors of the
Corporation creating a series of Preferred Stock, or by law, the holders of
shares of Series B Preferred Stock and the holders of Common Shares and any
other capital stock of the Corporation having general voting rights shall vote
together as one series on all matters submitted to a vote of stockholders of the
Corporation.
c. Except as set forth herein or as otherwise
provided by law, holders of Series B Preferred Stock shall have no voting
rights.
Exhibit 2 - page 6
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3. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series B
Preferred Stock unless, prior thereto, the holders of shares of Series B
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series B
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
GTR Stock, or (2) to the holders of shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up) with the Series
B Preferred Stock, except distributions made ratably on the Series B Preferred
Stock and all other such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time after
June 12, 1997 declare or pay any dividend on any shares of GTR Stock payable in
shares of GTR Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of GTR Stock (by reclassification or otherwise than by
payment of a dividend in shares of GTR Stock) into a greater or lesser number of
shares of GTR Stock, then in each such case the aggregate amount to which
holders of shares of Series B Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of GTR Stock outstanding immediately after such event and the
denominator of which is the number of shares of GTR Stock that were outstanding
immediately prior to such event.
4. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which Common Shares are exchanged for or changed into other stock or securities,
cash and/or any other property, then in any such case each share of Series B
Preferred Stock shall at the same time be similarly exchanged or changed into an
amount per share (subject to the provision for adjustment hereinafter set forth)
equal to 100 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for which
each share of GTR Stock is changed or exchanged. In the event the Corporation
shall at any time after June 12, 1997 declare or pay any dividend on any shares
of GTR Stock payable in shares of GTR Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of GTR Stock (by
reclassification or otherwise than by payment of a dividend in shares of GTR
Stock) into a greater or lesser number of shares of GTR Stock, then in each such
case the amount set forth in the preceding sentence with respect to the exchange
or change of shares of Series B Preferred Stock shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number of shares of GTR
Stock outstanding immediately after such event and the denominator of which is
the number of shares of GTR Stock that were outstanding immediately prior to
such event.
D. Series C Preferred Stock. A description of the Series C
Preferred Stock and a statement of its preferences, voting powers,
qualifications and special or relative rights or privileges is as follows:
Exhibit 2 - page 7
<PAGE> 8
1. Dividends and Distributions.
a. Subject to the prior and superior rights of
the holders of any shares of any series of Preferred Stock ranking prior and
superior to the Series C Preferred Stock with respect to dividends, the holders
of shares of Series C Preferred Stock, in preference to the holders of Common
Shares, and of any other junior stock, shall be entitled to receive, when, as
and if declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the first day of March, June,
September and December in each year (each such date being referred to herein as
a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series C Preferred Stock, in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $1.00 or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions, other than a dividend on shares of
Genzyme Molecular Oncology Division Common Stock (the "GMO Stock") payable in
shares of GMO Stock or a subdivision of the outstanding shares of GMO Stock (by
reclassification or otherwise), declared on the GMO Stock since the immediately
preceding Quarterly Dividend Payment Date or, with respect to the first
Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series C Preferred Stock. In the event the Corporation
shall at any time after June 12, 1997 declare or pay any dividend on any shares
of GMO Stock payable in shares of GMO Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of GMO Stock (by
reclassification or otherwise than by payment of a dividend in shares of GMO
Stock) into a greater or lesser number of shares of GMO Stock, then in each such
case the amount to which holders of shares of Series C Preferred Stock were
entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of GMO Stock outstanding immediately
after such event and the denominator of which is the number of shares of GMO
Stock that were outstanding immediately prior to such event.
b. The Corporation shall declare a dividend or
distribution on the Series C Preferred Stock as provided in paragraph a. of this
Section C.1 immediately after it declares a dividend or distribution on any
shares of GMO Stock (other than a dividend payable in shares of GMO Stock),
provided that, in the event no dividend or distribution shall have been declared
on the GMO Stock during the period between any Quarterly Dividend Payment Date
and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Series C Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
c. Dividends shall begin to accrue and be
cumulative on outstanding shares of Series C Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series C Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be
Exhibit 2 - page 8
<PAGE> 9
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series C
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series C Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more than 60 days
prior to the date fixed for the payment thereof.
2. Voting Rights. The holders of shares of Series C
Preferred Stock shall have the following voting rights:
a. Subject to the provision for adjustment
hereinafter set forth, each share of Series C Preferred Stock shall entitle the
holder thereof to 100 times the number of votes to which the holder of each
outstanding share of GMO Stock is then entitled on all matters submitted to a
vote of the stockholders of the Corporation. In the event the Corporation shall
at any time after June 12, 1997 declare or pay any dividend on any shares of GMO
Stock payable in shares of GMO Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of GMO Stock (by reclassification or
otherwise than by payment of a dividend in shares of GMO Stock) into a greater
or lesser number of shares of GMO Stock, then in each such case the number of
votes per share to which holders of shares of Series C Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares of GMO
Stock outstanding immediately after such event and the denominator of which is
the number of shares of GMO Stock that were outstanding immediately prior to
such event.
b. Except as otherwise provided herein, in the
Articles of Organization, in any other vote of the Board of Directors of the
Corporation creating a series of Preferred Stock, or by law, the holders of
shares of Series C Preferred Stock and the holders of Common Shares and any
other capital stock of the Corporation having general voting rights shall vote
together as one series on all matters submitted to a vote of stockholders of the
Corporation.
c. Except as set forth herein or as otherwise
provided by law, holders of Series C Preferred Stock shall have no voting
rights.
3. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series C
Preferred Stock unless, prior thereto, the holders of shares of Series C
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series C
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
GMO Stock, or (2) to the holders of shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up) with the Series
C Preferred Stock, except distributions made ratably on the Series C Preferred
Stock and all other such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
Exhibit 2 - page 9
<PAGE> 10
dissolution or winding up. In the event the Corporation shall at any time after
June 12, 1997 declare or pay any dividend on any shares of GMO Stock payable in
shares of GMO Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of GMO Stock (by reclassification or otherwise than by
payment of a dividend in shares of GMO Stock) into a greater or lesser number of
shares of GMO Stock, then in each such case the aggregate amount to which
holders of shares of Series C Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of GMO Stock outstanding immediately after such event and the
denominator of which is the number of shares of GMO Stock that were outstanding
immediately prior to such event.
4. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which Common Shares are exchanged for or changed into other stock or securities,
cash and/or any other property, then in any such case each share of Series C
Preferred Stock shall at the same time be similarly exchanged or changed into an
amount per share (subject to the provision for adjustment hereinafter set forth)
equal to 100 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for which
each share of GMO Stock is changed or exchanged. In the event the Corporation
shall at any time after June 12, 1997 declare or pay any dividend on shares of
GMO Stock payable in shares of GMO Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of GMO Stock (by reclassification or
otherwise than by payment of a dividend in shares of GMO Stock) into a greater
or lesser number of shares of GMO Stock, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change of shares
of Series C Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of GMO Stock
outstanding immediately after such event and the denominator of which is the
number of shares of GMO Stock that were outstanding immediately prior to such
event.
E. Series D Preferred Stock. A description of the Series D
Preferred Stock and a statement of its preferences, voting powers,
qualifications and special or relative rights or privileges is as follows:
1. Dividends and Distributions.
a. Subject to the prior and superior rights of
the holders of any shares of any series of Preferred Stock ranking prior and
superior to the Series D Preferred Stock with respect to dividends, the holders
of shares of Series D Preferred Stock, in preference to the holders of Common
Shares, and of any other junior stock, shall be entitled to receive, when, as
and if declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the first day of March, June,
September and December in each year (each such date being referred to herein as
a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series D Preferred Stock, in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $1.00 or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions, other than a
Exhibit 2 - page 10
<PAGE> 11
dividend on shares of Genzyme Surgical Products Division Common Stock (the "GSP
Stock") payable in shares of GSP Stock or a subdivision of the outstanding
shares of GSP Stock (by reclassification or otherwise), declared on the GSP
Stock since the immediately preceding Quarterly Dividend Payment Date or, with
respect to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series D Preferred Stock. In the event
the Corporation shall at any time after May 26, 1999 declare or pay any dividend
on any shares of GSP Stock payable in shares of GSP Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of GSP
Stock (by reclassification or otherwise than by payment of a dividend in shares
of GSP Stock) into a greater or lesser number of shares of GSP Stock, then in
each such case the amount to which holders of shares of Series D Preferred Stock
were entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of GSP Stock outstanding immediately
after such event and the denominator of which is the number of shares of GSP
Stock that were outstanding immediately prior to such event.
b. The Corporation shall declare a dividend or
distribution on the Series D Preferred Stock as provided in paragraph a. of this
Section C.1 immediately after it declares a dividend or distribution on any
shares of GSP Stock (other than a dividend payable in shares of GSP Stock),
provided that, in the event no dividend or distribution shall have been declared
on the GSP Stock during the period between any Quarterly Dividend Payment Date
and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Series D Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
c. Dividends shall begin to accrue and be
cumulative on outstanding shares of Series D Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series D Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series D Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series D Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the date
fixed for the payment thereof.
2. Voting Rights. The holders of shares of Series D
Preferred Stock shall have the following voting rights:
a. Subject to the provision for adjustment
hereinafter set forth, each share of Series D Preferred Stock shall entitle the
holder thereof to 100 times the number of votes to which the holder of each
outstanding share of GSP Stock is then entitled on all matters submitted to a
vote of the stockholders of the Corporation. In the event the Corporation shall
at
Exhibit 2 - page 11
<PAGE> 12
any time after May 26, 1999 declare or pay any dividend on any shares of GSP
Stock payable in shares of GSP Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of GSP Stock (by reclassification or
otherwise than by payment of a dividend in shares of GSP Stock) into a greater
or lesser number of shares of GSP Stock, then in each such case the number of
votes per share to which holders of shares of Series D Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares of GSP
Stock outstanding immediately after such event and the denominator of which is
the number of shares of GSP Stock that were outstanding immediately prior to
such event.
b. Except as otherwise provided herein, in the
Articles of Organization, in any other vote of the Board of Directors of the
Corporation creating a series of Preferred Stock, or by law, the holders of
shares of Series D Preferred Stock and the holders of Common Shares and any
other capital stock of the Corporation having general voting rights shall vote
together as one series on all matters submitted to a vote of stockholders of the
Corporation.
c. Except as set forth herein or as otherwise
provided by law, holders of Series D Preferred Stock shall have no voting
rights.
3. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series D
Preferred Stock unless, prior thereto, the holders of shares of Series D
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series D
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
GSP Stock, or (2) to the holders of shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up) with the Series
D Preferred Stock, except distributions made ratably on the Series D Preferred
Stock and all other such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time after
May 26, 1999 declare or pay any dividend on any shares of GSP Stock payable in
shares of GSP Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of GSP Stock (by reclassification or otherwise than by
payment of a dividend in shares of GSP Stock) into a greater or lesser number of
shares of GSP Stock, then in each such case the aggregate amount to which
holders of shares of Series D Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of GSP Stock outstanding immediately after such event and the
denominator of which is the number of shares of GSP Stock that were outstanding
immediately prior to such event.
4. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which Common Shares are exchanged for or changed into other stock or securities,
cash and/or any other property, then in any such case each share of Series D
Preferred Stock shall at the same time be similarly exchanged or
Exhibit 2 - page 12
<PAGE> 13
changed into an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of GSP Stock is changed or exchanged. In
the event the Corporation shall at any time after May 26, 1999 declare or pay
any dividend on shares of GSP Stock payable in shares of GSP Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of GSP
Stock (by reclassification or otherwise than by payment of a dividend in shares
of GSP Stock) into a greater or lesser number of shares of GSP Stock, then in
each such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Series D Preferred Stock shall be adjusted
by multiplying such amount by a fraction, the numerator of which is the number
of shares of GSP Stock outstanding immediately after such event and the
denominator of which is the number of shares of GSP Stock that were outstanding
immediately prior to such event.
F. General Provisions. Except as otherwise specifically provided
in a particular series of Junior Preferred Stock, the following provisions shall
apply to all series of Junior Preferred Stock:
1. Certain Restrictions.
a. Whenever quarterly dividends or other
dividends or distributions payable on the Junior Preferred Stock are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Junior Preferred Stock outstanding shall have been
paid in full, the Corporation shall not:
(1) declare or pay dividends, or make
any other distributions, on any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Junior
Preferred Stock;
(2) declare or pay dividends, or make
any other distributions, on any shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the Junior
Preferred Stock, except dividends paid ratably on the Junior Preferred Stock and
all such parity stock on which dividends are payable or in arrears in proportion
to the total amounts to which the holders of all such shares are then entitled;
(3) redeem or purchase or otherwise
acquire for consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Junior
Preferred Stock, provided that the Corporation may at any time redeem, purchase
or otherwise acquire shares of any such junior stock in exchange for shares of
any stock of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Junior Preferred Stock; or
(4) redeem, purchase or otherwise
acquire for consideration any shares of Junior Preferred Stock, or any shares of
stock ranking on a parity with the Junior Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as the Board
of Directors, after consideration of the respective annual dividend rates and
other relative rights
Exhibit 2 - page 13
<PAGE> 14
and preferences of the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the respective series or
classes.
2. The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph a. of
this paragraph E.1. purchase or otherwise acquire such shares at such time and
in such manner.
G. Reacquired Shares. Any shares of Junior Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as shares of the same series of Preferred
Stock or as part of a new series of Preferred Stock, subject to the conditions
and restrictions on issuance set forth herein, in the Articles of Organization,
in any other vote of the Board of Directors of the Corporation creating a series
of Preferred Stock, or as otherwise required by law.
H. Redemption. The shares of Junior Preferred Stock shall not be
redeemable.
I. Rank. The Series A Preferred Stock, the Series B Preferred
Stock, the Series C Preferred Stock and the Series D Preferred Stock shall rank
equally with respect to the payment of dividends and the distribution of assets
together with any other series of the Corporation's Preferred Stock that
specifically provide that they shall rank equally with Junior Preferred Stock.
The Junior Preferred Stock shall rank junior with respect to the payment of
dividends and the distribution of assets to all series of the Corporation's
Preferred Stock that specifically provide that they shall rank prior to the
Junior Preferred Stock. Nothing herein shall preclude the Board from creating
any series of Preferred Stock ranking on a parity with or prior to the Junior
Preferred Stock as to the payment of dividends or the distribution of assets.
J. Amendment. The Articles of Organization of the Corporation
shall not be amended in any manner which would materially alter or change the
powers, preferences or special rights of the holders of Junior Preferred Stock
so as to affect them adversely without the affirmative vote of the holders of at
least two-thirds of each outstanding series of Junior Preferred Stock, voting
together as a single series, provided that, any two or more series of Junior
Preferred Stock that are adversely affected in the same manner shall vote
together as a single class.
K. Fractional Shares. The Junior Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of the Junior Preferred Stock.
Exhibit 2 - page 14
<PAGE> 15
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto
signed our names this 10th day of June in the year 1999.
/s/ Michael S. Wyzga, Senior Vice President
----------------
/s/ Peter Wirth, Clerk
-----------
Exhibit 2 - page 15
<PAGE> 16
THE COMMONWEALTH OF MASSACHUSETTS
Certificate of Vote of Directors Establishing
A Series of a Class of Stock
(General Laws, Chapter 156B, Section 26)
I hereby approve the within certificate and, the
Filing fee in the amount of $__________________
having been paid, said certificate is hereby filed this
_____________ day of ________________, 19__.
William Francis Galvin
Secretary of the Commonwealth
TO BE FILLED IN BY CORPORATION
PHOTO COPY OF CERTIFICATE TO BE SENT
TO:
Paul Laurino, Esq.
Palmer & Dodge LLP
One Beacon Street, Boston, MA 02108
Telephone (617) 573-0510
Exhibit 2 - page 16
<PAGE> 1
EXHIBIT 4
GENZYME CORPORATION
and
American Stock Transfer & Trust Company,
Rights Agent
Amended and Restated Renewed Rights Agreement
Dated as of June 10, 1999
Exhibit 4 - page 1
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
Section 1. Certain Definitions........................................................................2
Section 2. Appointment of Rights Agent................................................................6
Section 3. Issue of Right Certificates................................................................6
Section 4. Forms of Right Certificates................................................................8
Section 5. Countersignature and Registration..........................................................8
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates....................................9
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.............................10
Section 8. Cancellation and Destruction of Right Certificates........................................11
Section 9. Reservation and Availability of Preferred Shares..........................................12
Section 10. Preferred Shares Record Date..............................................................13
Section 11. Adjustment in Rights; Exchange of Rights; Certain Covenants...............................13
Section 12. Certificate of Adjustment.................................................................20
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power......................20
Section 14. Fractional Rights and Fractional Shares...................................................22
Section 15. Rights of Action..........................................................................24
Section 16. Agreement of Right Holders................................................................24
Section 17. Right Certificate Holder Not Deemed a Shareholder.........................................25
Section 18. Concerning the Rights Agent...............................................................25
Section 19. Merger or Consolidation or Change of Name of Rights Agent.................................25
Section 20. Duties of Rights Agent....................................................................26
Section 21. Change of Rights Agent....................................................................28
Section 22. Issuance of New Right Certificates........................................................29
Section 23. Redemption................................................................................29
Section 24. Notice of Certain Events..................................................................30
Section 25. Notices...................................................................................30
Section 26. Supplements and Amendments................................................................31
Section 27. Successors................................................................................32
Section 28. Determinations and Actions by the Board of Directors......................................32
Section 29. Benefits of this Agreement................................................................32
</TABLE>
Exhibit 4 - page 2
<PAGE> 3
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
Section 30. Severability..............................................................................32
Section 31. Governing Law.............................................................................32
Section 32. Counterparts..............................................................................32
Section 33. Descriptive Headings......................................................................33
EXHIBIT A -- CERTIFICATE OF DESIGNATIONS...............................................................A-1
EXHIBIT B -- FORM OF RIGHT CERTIFICATE.................................................................B-1
</TABLE>
Exhibit 4 - page 3
<PAGE> 4
AMENDED AND RESTATED RENEWED RIGHTS AGREEMENT
Amended and Restated Renewed Rights Agreement (this "Agreement"), dated
as of June 10, 1999, between Genzyme Corporation, a Massachusetts corporation
(the "Company"), and American Stock Transfer & Trust Company, (the "Rights
Agent").
This Agreement amends, restates and supersedes the Renewed Rights
Agreement dated as of March 16, 1999 (the "Renewed Agreement") between the
Company and the Rights Agent.
WHEREAS, on March 2, 1999, the Board of Directors of the Company (the
"Board") (i) deemed it desirable and in the best interest of the Company and its
shareholders for the Company to renew the Company's shareholder rights plan,
(ii) adopted the Renewed Agreement which became effective on March 28, 1999 (the
"Effective Date") upon the expiration of the original shareholder rights plan,
(iii) authorized and declared a dividend distribution of (x) one General Stock
Purchase Right (a "GGD Stock Right") for each share of GGD Stock (as such term
is hereinafter defined), outstanding upon the Effective Date (y) one GTR Stock
Purchase Right (a "GTR Stock Right") for each share of GTR Stock outstanding
upon the Effective Date and (z) one GMO Stock Purchase Right (a "GMO Stock
Right") for each share of GMO Stock outstanding upon the Effective Date, and
(iv) authorized and directed the issuance of one Right (as such number may
hereafter be adjusted pursuant to Section 11 hereof) and for each Common Share
issued after the Effective Date (whether originally issued or delivered from the
Company's treasury) but prior to the earliest of the "Distribution Date," the
"Redemption Date" and the "Final Expiration Date," each as defined in this
Agreement;
WHEREAS, on May 26, 1999, the Board approved this Agreement, which is
an amendment and restatement of the Renewed Agreement, effective upon the
creation of the GSP Stock (as such term is hereinafter defined).
WHEREAS, in connection with such amendment, the Board authorized and
directed the issuance of one GSP Stock Purchase Right (a "GSP Stock Right") for
each share of GSP Stock issued by the Company (as such number may hereafter be
adjusted pursuant to Section 11 hereof) on or after the date hereof and prior to
the earliest of the Distribution Date, the Redemption Date and the Final
Expiration Date; and
WHEREAS, each GGD Stock Right, GTR Stock Right, GMO Stock Right and GSP
Stock Right initially represents the right to purchase one one-hundredth of a
share of the Company's Series A Junior Participating Preferred Stock, par value
$.01 per share ("Series A Preferred Stock"), one one-hundredth of a share of
Series B Junior Participating Preferred Stock, par value $.01 per share ("Series
B Preferred Stock"), one one-hundredth of a share of Series C Junior
Participating Preferred Stock, par value $.01 per share ("Series C Preferred
Stock"), and one one-hundredth of a share of Series D Junior Participating
Preferred Stock, par value $.01 per share ("Series D Preferred Stock"),
respectively, such preferred shares having the rights and preferences set forth
in the Certificate of Vote Establishing Series A, Series B, Series C and Series
D Junior Participating Preferred Stock filed with the Secretary of the
Commonwealth of Massachusetts on June 10, 1999 and a copy of which is attached
hereto as Exhibit A, upon the terms and subject to the conditions herein set
forth;
Exhibit 4 - page 4
<PAGE> 5
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) (i) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, shall become, after the
Effective Date, the Beneficial Owner (as such term is hereinafter defined) of
Common Shares representing 15% or more of the total Voting Rights of all the
Common Shares then outstanding, but shall not include the Company, any
Subsidiary (as such term is hereinafter defined) of the Company, or any employee
benefit plan of the Company or any Subsidiary of the Company, or any entity
organized, appointed or established by the Company holding Common Shares for or
pursuant to the terms of any such plan; provided, however, that if a Person
inadvertently becomes the Beneficial Owner of Common Shares representing 15% or
more of such Voting Rights solely due to an adjustment in the number of votes to
which GMO Stock, GTR Stock or GSP Stock is entitled pursuant to the Company's
Articles of Organization, such Person shall not be an Acquiring Person unless
and until such Person acquires additional Common Shares.
(ii) Notwithstanding the foregoing, a Person shall not become
an "Acquiring Person" solely as the result of an acquisition of Common Shares by
the Company or any Subsidiary which, by reducing the number of shares
outstanding, increases the proportionate number of shares beneficially owned by
such Person to 15% or more of the Common Shares then outstanding as determined
above; provided, however, that if a Person becomes the Beneficial Owner of 15%
or more of the Common Shares then outstanding as determined above solely by
reason of such a share acquisition by the Company and such Person shall, after
becoming the Beneficial Owner of such Common Shares, become the Beneficial Owner
of any additional Common Shares by any means whatsoever (other than as a result
of the subsequent occurrence of a stock dividend or a subdivision of the Common
Shares into a larger number of shares or a similar transaction), then such
Person shall be deemed to be an "Acquiring Person."
(iii) Notwithstanding the foregoing, if a majority of the
Board determines in good faith that a Person who would otherwise be an
"Acquiring Person," as defined pursuant to the foregoing provisions of this
Section 1(a), has become such inadvertently, and such Person divests as promptly
as practicable a sufficient number of Common Shares so that such Person would no
longer be an "Acquiring Person," as defined pursuant to the foregoing provisions
of this Section 1(a), then such Person shall not be deemed to be an "Acquiring
Person" for any purposes of this Agreement. The determination of whether such
Person's becoming an Acquiring Person shall have been inadvertent and the
determination of whether the divestment of sufficient shares shall have been
made as promptly as practicable shall be made by the Board.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the date of this Agreement.
Exhibit 4 - page 5
<PAGE> 6
(c) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in writing), or upon the exercise
of conversion rights, exchange rights, rights (other than the Rights at any time
prior to the occurrence of a Triggering Event, as hereinafter defined, but
thereafter including Rights acquired from and after the Distribution Date (as
defined in Section 3(a) below) other than Rights acquired pursuant to Section
3(a), 11(a)(iv) or 22 hereof), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, securities tendered pursuant to a tender or exchange offer
made by or on behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase or exchange;
or (B) the right to vote or dispose of or "beneficial ownership" (as defined in
Rule 13d-3 of the General Rules and Regulations under the Exchange Act) of
(including pursuant to any agreement, arrangement or understanding, whether or
not in writing); provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security if the agreement,
arrangement or understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the applicable
rules and regulations of the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which such Person
or any of such Person's Affiliates or Associates has any agreement, arrangement
or understanding for the purpose of acquiring, holding, voting (except to the
extent contemplated by the proviso to Section 1(c)(ii)(B)) or disposing of any
securities of the Company.
(d) "Business Day" shall mean any day other than a Saturday, Sunday or
a day on which banking institutions in the Commonwealth of Massachusetts are
authorized or obligated by law or executive order to close.
(e) "Close of business" on any given date shall mean 5:00 P.M.,
Massachusetts time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Massachusetts time, on the next succeeding
Business Day.
(f) "Common Shares" when used with reference to the Company shall mean
the GGD Stock, the GTR Stock, the GMO Stock and/or GSP Stock, as the context
requires, or any other shares of capital stock of the Company into which GGD
Stock, GTR Stock, GMO Stock and/or GSP Stock may be reclassified or changed;
provided, however, that "Common Shares" shall mean all of the GGD Stock, the GTR
Stock, GMO Stock and GSP Stock (or any other shares of capital stock into which
GGD Stock, GTR Stock, GMO Stock and/or GSP Stock may be reclassified or changed)
whenever a determination of whether a Person shall have become the
Exhibit 4 - page 6
<PAGE> 7
Beneficial Owner of, or shall have made a tender or exchange offer for, Common
Shares representing a specified percentage of the total Voting Rights of all the
Common Shares then outstanding is required to be made herein. "Common Shares"
when used with reference to any Person other than the Company shall mean the
capital stock with the greatest voting power of such other Person or equity
interest having power to control or direct the management of such Person, or, if
such other Person is a Subsidiary of another Person, the Person or Persons which
ultimately controls such first-mentioned Person.
(g) "Final Expiration Date" shall mean the close of business on March
28, 2009.
(h) "GGD Stock" shall mean the Genzyme General Division Common Stock,
par value $.01 per share, of the Company.
(i) "GMO Stock" shall mean the Genzyme Molecular Oncology Division
Common Stock of the Company.
(j) "GSP Stock" shall mean the Genzyme Surgical Products Division
Common Stock of the Company.
(k) "GTR Stock" shall mean the Genzyme Tissue Repair Division Common
Stock of the Company.
(l) "Person" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such entity.
(m) "Preferred Shares" shall mean shares of Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock and/or Series D Preferred
Stock as the context requires.
(n) "Redemption Date" shall mean the time at which Rights are redeemed
as provided in Section 23 hereof.
(o) "Rights" shall mean GGD Stock Rights, GTR Stock Rights, GMO Stock
Rights, and/or GSP Stock Rights as the context requires.
(p) "Shares Acquisition Date" shall mean the first date of public
announcement by the Company that an Acquiring Person has become such.
(q) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interests is beneficially owned, directly or indirectly, by such
Person.
(r) "Triggering Event" shall mean a Person becoming an Acquiring
Person.
(s) "Voting Rights" when used with reference to the capital stock of,
or units of equity interest in, any Person shall mean the right under ordinary
circumstances to vote in the election of directors of such Person (if such
Person is a corporation) or to participate in the management and control of such
Person (if such Person is not a corporation).
Exhibit 4 - page 7
<PAGE> 8
(t) The following terms shall have the meanings indicated in the
following Sections of this Agreement:
(i) "Act" - Section 9(b).
(ii) "Adjustment Shares" - Section 11(b).
(iii) "Agreement" -- Preamble.
(iv) "Board" - Preamble.
(v) "Current Value" - Section 11(c)(i).
(vi) "Distribution Date" - Section 3(a).
(vii) "Effective Date" -- Preamble.
(viii) "Exchange Act" - Section 1(b)
(ix) "Exchange Consideration" - Section 11(c)(ii)(A).
(x) "Extension Date" - Section 26.
(xi) "GGD Stock Right" - Preamble.
(xii) "GGD Stock Right Certificate" - Section 3(a).
(xiii) "GMO Stock Right" - Preamble.
(xiv) "GMO Stock Right Certificate" - Section 3(a).
(xv) "GSP Stock Right" - Preamble.
(xvi) "GSP Stock Right Certificate" - Section 3(a).
(xvii) "GTR Stock Right" - Preamble.
(xviii) "GTR Stock Right Certificate" - Section 3(a).
(xix) "Nasdaq" - Section 11(d).
(xx) "NYSE" - Section 11(d).
(xxi) "Principal Party" - Section 13(b).
(xxii) "Purchase Price" - Sections 4, 7, 11(b) and 13(a).
(xxiii) "Redemption Price" - Section 23(a)(i).
(xxiv) "Renewed Agreement" - Preamble.
Exhibit 4 - page 8
<PAGE> 9
(xxv) "Restated Date" - the date of this Agreement.
(xxvi) "Rights Agent" - Preamble.
(xxvii) "Series A Preferred Stock" - Preamble.
(xxviii) "Series B Preferred Stock" - Preamble.
(xxix) "Series C Preferred Stock" - Preamble.
(xxx) "Series D Preferred Stock" - Preamble.
(xxxi) "Spread" - Section 11(c).
(xxxii) "Substitution Period" - Section 11(c).
(xxxiii) "Trading Day" - Section 11(d)(i).
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Shares) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. Upon prior written
notice to the Rights Agent, the Company may from time to time appoint such
co-Rights Agents as it may deem necessary or desirable (the term "Rights Agent"
being used herein to refer, collectively, to the Rights Agent together with any
such co-Rights Agent).
Section 3. Issue of Right Certificates.
(a) Until the earlier of (i) the close of business on the tenth day (or
such later date as may be determined by the Board) after the Shares Acquisition
Date or (ii) the close of business on the tenth Business Day (or such later date
as may be determined by the Board) after the date of the commencement of, or of
the first public announcement of the intention of any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the Company
or of any Subsidiary of the Company or any entity organized, appointed or
established by the Company holding Common Shares for or pursuant to the terms of
any such plan) to commence, within the meaning of Rule 14d-2(a) of the General
Rules and Regulations under the Exchange Act, a tender or exchange offer the
consummation of which would result in beneficial ownership by a Person of Common
Shares representing 15% or more of the total Voting Rights of all the
outstanding Common Shares (the earliest of such dates being herein referred to
as the "Distribution Date"), (x) the GGD Stock Rights, GTR Stock Rights, GMO
Stock Rights and GSP Stock Rights will be evidenced by the certificates for GGD
Stock, GTR Stock, GMO Stock and GSP Stock, respectively, registered in the names
of the holders thereof (which certificates for GGD Stock, GTR Stock, GMO Stock
and GSP Stock shall also be deemed to be certificates for GGD Stock Rights, GTR
Stock Rights, GMO Stock Rights and GSP Stock Rights, respectively) and not by
separate Right Certificates, and (y) the right to receive Right Certificates
will be transferable only in connection with the transfer of Common Shares. As
soon as practicable after the Distribution Date, the Company will prepare and
execute, the Rights Agent
Exhibit 4 - page 9
<PAGE> 10
will countersign, and the Company will send or cause
to be sent (and the Rights Agent will, if requested, send) by first-class,
insured, postage-prepaid mail, to each record holder of GGD Stock, GTR Stock,
GMO Stock and GSP Stock as of the close of business on the Distribution Date, at
the address of such holder shown on the records of the Company, a right
certificate, in substantially the form of Exhibit B hereto (a "GGD Stock Right
Certificate," "GTR Stock Right Certificate," "GMO Stock Right Certificate" or
"GSP Stock Right Certificate," as the case may be), evidencing one GGD Stock
Right for each share of GGD Stock so held, one GTR Stock Right for each share of
GTR Stock so held, one GMO Stock Right for each share of GMO Stock so held and
one GSP Stock Right for each share of GSP Stock so held. In the event that an
adjustment in the number of Rights per Common Share has been made pursuant to
Section 11(a) hereof, at the time of distribution of the Right Certificates, the
Company shall make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) so that Right Certificates representing
only whole numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of the Distribution Date, the Rights will be evidenced
solely by such Right Certificates.
(b) Until the earliest of the Distribution Date, the Redemption Date or
Final Expiration Date, the surrender for transfer of any certificate for Common
Shares shall also constitute the transfer of the Rights associated with the
Common Shares represented thereby.
(c) (i) With respect to certificates for Common Shares of the Company
outstanding immediately prior to the Restatement Date, until the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date, the Rights
will be evidenced by certificates for Common Shares as legended pursuant to the
terms of the Renewed Agreement, and the registered holders of the Common Shares
of the Company shall also be the registered holders of the associated Rights.
(ii) Certificates for Common Shares which become outstanding
(including, without limitation, reacquired Common Shares referred to in the last
sentence of this paragraph (c)) on or after the Restatement Date but prior to
the earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in the Amended and Restated
Renewed Rights Agreement between Genzyme Corporation &
American Stock Transfer & Trust Company dated as of June 10,
1999 (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on
file at the principal executive offices of Genzyme
Corporation. Under certain circumstances, as set forth in the
Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
certificate. Genzyme Corporation will mail to the holder of
this certificate a copy of the Rights Agreement without charge
after receipt of a written request therefor. Under certain
circumstances, Rights beneficially owned by Acquiring Persons
(as defined in the Rights Agreement) and any subsequent holder
of such Rights may become null and void.
Exhibit 4 - page 10
<PAGE> 11
(iii) With respect to such certificates containing the
foregoing legends, until the Distribution Date, the Rights associated with the
Common Shares represented by such certificates shall be evidenced by such
certificates alone, and the surrender for transfer of any such certificate shall
also constitute the transfer of the Rights associated with the Common Shares
represented thereby. In the event that the Company purchases or acquires any
Common Shares on or after the Restatement Date but prior to the Distribution
Date, any Rights associated with such Common Shares shall be deemed cancelled
and retired so that the Company shall not be entitled to exercise any Rights
associated with the Common Shares which are no longer outstanding.
(d) Notwithstanding the requirements of Section 3(c), the omission of a
legend shall not affect the enforceability of any part of this Agreement or the
rights of any holder of Rights.
Section 4. Forms of Right Certificates. The GGD Stock Right
Certificates, the GTR Stock Right Certificates, the GMO Stock Right Certificates
and the GSP Stock Right Certificates (and the forms of election to purchase
Preferred Shares and of assignment to be printed on the reverse thereof) shall
be in substantially the forms set forth as Exhibit B hereto, and may have such
marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. Subject to the
provisions of Sections 11 and 22 hereof, the Right Certificates shall entitle
the holders thereof to purchase such number of one one-hundredths of a Preferred
Share as shall be set forth therein at the price per one one-hundredth of a
Preferred Share set forth therein (the "Purchase Price"), but the number of such
one one-hundredths of a Preferred Share and the Purchase Price shall be subject
to adjustment as provided herein.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its President or any Vice President, either
manually or by facsimile signature, shall have affixed thereto the Company's
seal or a facsimile thereof, and shall be attested by the Clerk or an Assistant
Clerk of the Company, either manually or by facsimile signature. The Right
Certificates shall be countersigned manually, or, if permitted by the Company,
by facsimile signature, by the Rights Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company who shall
have signed any of the Right Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and delivery by
the Company, such Right Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with the same force and
effect as though the person who signed such Right Certificates had not ceased to
be such officer of the Company; and any Right Certificate may be signed on
behalf of the Company by any person who, at the actual date of the execution of
such Right Certificate, shall be a proper officer of the Company to sign such
Right Certificate, although at the date of the execution of this Agreement any
such person was not such an officer.
Exhibit 4 - page 11
<PAGE> 12
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its office designated for such purposes, books for
registration and transfer of the Right Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Sections 7(e) and 14 hereof, at any
time after the close of business on the Distribution Date, and at or prior to
the close of business on the earlier of the Redemption Date or the Final
Expiration Date, any Right Certificate or Right Certificates may be transferred,
split up, combined or exchanged for another Right Certificate or Right
Certificates, entitling the registered holder to purchase a like number of one
one-hundredths of a Preferred Share (or, following a Triggering Event, Common
Shares, other securities or property, as the case may be) as the Right
Certificate or Right Certificates surrendered then entitled such holder (or
former holder in the case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Right Certificate or
Right Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the office of the Rights Agent
designated for such purposes. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any such
surrendered Right Certificate until the registered holder shall have completed
and signed the certificate contained in the form of assignment on the reverse
side of such Right Certificate and shall have provided such additional evidence
of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall request. Thereupon the
Rights Agent shall (subject to Section 7(e) hereof) countersign and deliver to
the person entitled thereto a Right Certificate or Right Certificates, as the
case may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
(c) Notwithstanding any other provision hereof, the Company and the
Rights Agent may amend this Rights Agreement to provide for uncertificated
Rights in addition to or in place of Rights evidenced by Right Certificates.
Exhibit 4 - page 12
<PAGE> 13
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Subject to Section 7(e) hereof, the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the Distribution Date
upon surrender of the Right Certificate, with the form of election to purchase
and the certificate contained in the form of election to purchase on the reverse
side of the Right Certificate duly executed, to the Rights Agent at the
principal offices of the Rights Agent, together with payment of the Purchase
Price for the Preferred Shares (or other shares, securities or property, as the
case may be) as to which the Rights are exercised, at or prior to the earlier of
the Redemption Date and the Final Expiration Date.
(b) The Purchase Price with respect to each GGD Stock Right shall
initially be $300 for each one one-hundredth of a Series A Preferred Share; with
respect to each GTR Stock Right shall initially be $26 for each one
one-hundredth of a Series B Preferred Share; with respect to each GMO Stock
Right shall initially be $26 for each one one-hundredth of a Series C Preferred
Share; and with respect to each GSP Stock Right shall initially be $150 for each
one one-hundredth of a Series D Preferred Share; shall be subject in each case
to adjustment from time to time as provided in Sections 11 and 13 hereof and
shall be payable in lawful money of the United States of America in accordance
with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase and the certificate contained in
the form of election to purchase and the Right Certificate duly executed,
accompanied by payment of the Purchase Price for the Preferred Shares (or other
shares, securities or property, as the case may be) to be purchased and an
amount equal to any applicable transfer tax required to be paid by the holder of
such Right Certificate in accordance with Section 9 hereof in cash, or by
certified check or cashier's check payable to the order of the Company, the
Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly (i) (A)
requisition from any transfer agent of the Preferred Shares certificates for the
number of Preferred Shares to be purchased (and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests), or (B) if the
Company shall have elected to deposit the Preferred Shares issuable upon
exercise of the Rights hereunder with a depositary agent, requisition from the
depositary agent depositary receipts representing such number of one
one-hundredths of a Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such receipts shall be
deposited by the transfer agent with the depositary agent) and the Company
hereby directs the depositary agent to comply with such request, (ii) when
appropriate, requisition from the Company the amount of cash to be paid in lieu
of issuance of fractional shares in accordance with Section 14 hereof, (iii)
promptly after receipt of such certificates or depositary receipts, cause the
same to be delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder and (iv) when appropriate, after receipt, promptly deliver such cash to
or upon the order of the registered holder of such Right Certificate. In the
event that the Company is obligated to issue other securities (including Common
Shares), pay cash and/or distribute other property pursuant to Section 11(a)
hereof, the Company will make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution by the
Rights Agent, if and when appropriate.
Exhibit 4 - page 13
<PAGE> 14
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, any
Rights beneficially owned by (i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person, (ii) a transferee from an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee after the Acquiring
Person becomes such (and any subsequent transferees of such transferee), or
(iii) a transferee of an Acquiring Person (or such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (A) a transfer (whether or not
for consideration) from the Acquiring Person to holders of equity interests in
such Acquiring Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void without any further
action, and any holder (including any subsequent holder) of such Rights shall
thereupon have no rights whatsoever with respect to such Rights, whether under
any provision of this Agreement or otherwise. The Company shall use all
reasonable efforts to insure that the provisions of this Section 7(e) hereof are
complied with, but shall have no liability to any holder of Right Certificates
or other Person as a result of its failure or inability to make any
determinations with respect to an Acquiring Person or its Affiliates, Associates
or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Right Certificate surrendered for
such exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall request.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the Company, or shall, at the written
request of the Company, destroy such cancelled Right Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.
Exhibit 4 - page 14
<PAGE> 15
Section 9. Reservation and Availability of Preferred Shares.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued Preferred Shares (and,
following the occurrence of a Triggering Event, Common Shares and/or other
securities) or any Preferred Shares (and, following the occurrence of a
Triggering Event, Common Shares and/or other securities) held in its treasury,
the number of Preferred Shares (and, following the occurrence of a Triggering
Event, Common Shares and/or other securities) that will be sufficient (in
accordance with the terms of this Agreement, including Section 11(c)(i) hereof)
to permit the exercise in full of all outstanding Rights. Prior to the
occurrence of a Triggering Event, the Company shall not be obliged to cause to
be reserved and kept available out of its authorized and unissued Common Shares
or shares of preferred stock (other than Preferred Shares), any such Common
Shares or any shares of preferred stock (other than Preferred Shares) to permit
exercise of outstanding Rights.
(b) If then required by applicable law, the Company shall use its best
efforts to (i) file, either (A) as soon as practicable following the earliest
date after the occurrence of a Triggering Event as to which the consideration to
be delivered by the Company upon exercise of the Rights has been determined
pursuant to this Agreement, or (B) as soon as is required by law following the
Distribution Date, as the case may be, a registration statement under the
Securities Act of 1933, as amended (the "Act"), with respect to the securities
purchasable upon exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable after such
filing, and (iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act) until the earlier
of (A) the date as of which the Rights are no longer exercisable for such
securities, and (B) the date of the expiration of the Rights. If then required
by applicable law, the Company will also take such action as may be appropriate
under the securities or "blue sky" laws of the various states. The Company may
temporarily suspend, for a period of time not to exceed ninety (90) days after
the date set forth in clause (i) of this Section 9(b), the exercisability of the
Rights in order to prepare and file such registration statement or to comply
with such blue sky laws. Upon any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction unless the
requisite qualification in such jurisdiction shall have been obtained.
(c) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all Preferred Shares delivered upon exercise
of Rights shall, at the time of delivery of the certificates for such Preferred
Shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and non-assessable shares.
(d) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Right Certificates or
of any Preferred Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right Certificates to a Person other than, or the
issuance or delivery of certificates or depositary receipts for the Preferred
Shares in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for
Exhibit 4 - page 15
<PAGE> 16
exercise or to issue or to deliver any certificates or depositary receipts for
Preferred Shares upon the exercise of any Rights until any such tax shall have
been paid (any such tax being payable by the holder of such Right Certificate at
the time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. Preferred Shares Record Date. Each Person in whose name any
certificate for Preferred Shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Preferred
Shares (or Common Shares and/or other securities, as the case may be)
represented thereby on, and such certificate shall be dated, the date upon which
the Right Certificate evidencing such Rights was duly surrendered and payment of
the Purchase Price (and any applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a date upon which the
Preferred Shares (or Common Shares and/or other securities, as the case may be)
transfer books of the Company are closed, such person shall be deemed to have
become the record holder of such shares on, and such certificate shall be dated,
the next succeeding Business Day on which the Preferred Shares (or Common Shares
and/or other securities, as the case may be) transfer books of the Company are
open. Prior to the exercise of the Rights evidenced thereby, the holder of a
Right Certificate shall not be entitled (in such holder's capacity as such) to
any rights of a shareholder of the Company with respect to shares for which the
Rights shall be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
Section 11. Adjustment in Rights; Exchange of Rights; Certain
Covenants. The Purchase Price, the number of Preferred Shares (or number and
kind of other shares of capital stock, as the case may be) covered by each Right
and the number of Rights outstanding are subject to adjustment from time to time
as provided in this Section 11.
(a) Anti-Dilution Adjustments; Adjustments, generally.
(i) To preserve the actual or potential economic value of the
Rights, if at any time after the date of this Agreement there shall be any
change in the Common Shares or the Preferred Shares, whether by reason of stock
dividends, stock splits, recapitalizations, reclassifications, mergers,
consolidations, combinations or exchanges of securities, split-ups, split-offs,
spin-offs, liquidations, other similar changes in capitalization, any
distribution or issuance of cash, assets, evidences of indebtedness or
subscription rights, options or warrants to holders of Common Shares or
Preferred Shares, as the case may be (other than the Rights or regular quarterly
cash dividends) or otherwise, then, in each such event adjustments in the number
of Preferred Shares (or the number and kind of other securities) issuable upon
exercise of each Right, the Purchase Price and Redemption Price in effect at
such time (including the number of Rights or fractional Rights associated with
each Common Share) shall be made if and as deemed appropriate by the Board, such
that following such adjustments such event shall not have had the effect of
reducing or limiting the benefits the holders of the Rights would have had
absent such event.
(ii) If, as a result of an adjustment made pursuant to this
Section 11, the holder of any Right thereafter exercised shall become entitled
to receive any securities other than
Exhibit 4 - page 16
<PAGE> 17
Preferred Shares, thereafter the number of such securities so receivable upon
exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions of
Section 11(a)(i), and the provisions of Sections 7, 9 and 10 with respect to the
Preferred Shares shall apply, as nearly as reasonably may be, on like terms to
any such other securities.
(iii) All Rights originally issued by the Company subsequent
to any adjustment made to the amount of Preferred Shares or other securities
relating to a Right shall evidence the right to purchase, for the Purchase
Price, the adjusted number and kind of securities purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.
(iv) Irrespective of any adjustment or change in the Purchase
Price or the number of Preferred Shares or number or kind of other securities
issuable upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the terms which were expressed in the
initial Right Certificates issued hereunder.
(v) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
the Purchase Price; provided, however, that any adjustments which by reason of
this Section 11(a) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest ten-thousandth of
a Common Share or other share or one-millionth of a Preferred Share as the case
may be. Notwithstanding the first sentence of this Section 11(a), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment or (ii)
the date of the expiration of the right to exercise any Rights.
(vi) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in substitution
for any adjustment in the number of one one-hundredths of a Preferred Share
purchasable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable for the number of
one one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the date of
the public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(a)(vi), the
Company shall, as promptly as practicable, cause to be distributed to holders of
record of Right Certificates on such record date Right Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which such holders shall
be entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date of
adjustment, and upon
Exhibit 4 - page 17
<PAGE> 18
surrender thereof, if required by the Company, new Right Certificates evidencing
all the Rights to which such holders shall be entitled after such adjustment.
Right Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein and shall be registered in the
names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(vii) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-hundredth of the then par value, if
any, of the Preferred Shares issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid and
non-assessable Preferred Shares at such adjusted Purchase Price.
(viii) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that it in its sole discretion shall determine
to be advisable in order that any (a) consolidation or subdivision of the
Preferred Shares, (b) issuance wholly for cash of any Preferred Shares at less
than the current market price, (c) issuance wholly for cash of Preferred Shares
or securities which by their terms are convertible into or exchangeable for
Preferred Shares, (d) dividends on Preferred Shares payable in Preferred Shares
or (e) issuance of rights, options or warrants referred to hereinabove in
Section 11(b), hereafter made by the Company to holders of its Preferred Shares
shall not be taxable to such shareholders.
(ix) In any case which action taken pursuant to Section
11(a)(i) requires that an adjustment be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
the Preferred Shares and/or other securities, if any, issuable upon such
exercise over and above the Preferred Shares and/or other securities, if any,
issuable before giving effect to such adjustment; provided, however, that the
Company shall deliver to such holder a due bill or other appropriate instrument
evidencing such holder's right to receive such additional securities upon the
occurrence of the event requiring such adjustment.
(b) Initial Adjustment Upon Triggering Event. Upon the first occurrence
of a Triggering Event (except as otherwise provided in this Agreement), proper
provision shall be made so that each holder of a Right, except as provided below
and in Section 7(e) hereof, shall thereafter have a right to receive, upon
exercise thereof at the then current Purchase Price in accordance with the terms
of this Agreement, in lieu of Preferred Shares and subject to the provisions of
Section 11(a), such number of shares of GGD Stock in the case of a GGD Stock
Right, GTR Stock in the case of a GTR Stock Right, GMO Stock in the case of a
GMO Stock Right, and GSP Stock in the case of a GSP Stock Right as shall equal
the result obtained by (x) multiplying the then current Purchase Price by the
number of one one-hundredths of a Preferred Share for which a Right was
exercisable immediately prior to the Triggering Event (whether or not such Right
was then exercisable), and dividing that product (which, following such
Triggering Event, shall be referred to as the "Purchase Price" for all purposes
of this Agreement) by (y) 50% of the then current per share market price of the
GGD Stock, GTR Stock, GMO Stock or GSP Stock in the case of a GGD Stock Right,
GTR Stock Right, GMO Stock Right or GSP Stock Right, respectively (determined
pursuant to Section 11(d)), on the date of the occurrence of the
Exhibit 4 - page 18
<PAGE> 19
Triggering Event (such number of shares being referred to herein as the
"Adjustment Shares"). Notwithstanding the foregoing, upon the occurrence of the
Triggering Event, any Rights that are or were on or after the earlier of the
Distribution Date or the date of the Triggering Event beneficially owned by an
Acquiring Person (or any Associate or Affiliate of such Acquiring Person) or by
certain transferees of such Persons as specified in Section 7(e), shall become
void and any holder (including subsequent holders) of such Rights shall
thereafter have no right to exercise such Rights under any provision of this
Agreement. Any Right Certificate issued pursuant to Section 3 or Section 22
hereof that represents Rights beneficially owned by an Acquiring Person or any
Associate or Affiliate thereof and any Right Certificate issued at any time upon
the transfer of any Rights to an Acquiring Person or any Associate or Affiliate
thereof or to any nominee of such Acquiring Person, Associate or Affiliate, and
any Right Certificate issued pursuant to Section 6, 7(d), 7(e) or 22 hereof or
this Section 11 upon transfer, exchange, replacement or adjustment of any other
Right Certificate referred to in this sentence, shall contain the following
legend:
The Rights represented by this Right Certificate were issued
to a Person who was an Acquiring Person or an Affiliate or an
Associate of an Acquiring Person (as such terms are defined in
the Rights Agreement). This Right Certificate and the Rights
represented hereby may become void in the circumstances
specified in the Rights Agreement, including Sections 7(e) and
11(a)(ii) thereof;
provided that the Rights Agent shall not be under any responsibility to
ascertain the existence of facts that would require the imposition of such
legend but shall be required to impose such legend only if instructed to do so
by the Company or if a holder fails to certify upon transfer or exchange in the
space provided on the Right Certificate that such holder is not an Acquiring
Person or an Affiliate or Associate thereof.
(c) Other Adjustments Upon or Following Triggering Event.
(i) Use of Common Equivalents or Cash. In the event that (x)
the total of the Common Shares that are issued but not outstanding and
authorized but unissued (excluding Common Shares reserved for issuance pursuant
to the specific terms of any indenture, option plan or other agreement) is not
sufficient to permit the exercise in full of the Rights in accordance with
Section 11(b) or 11(c)(ii) hereof, or (y) the total number of Common Shares
available for exercise of the Rights in accordance with Section 11(b) hereof is
sufficient to permit the exercise in full of the Rights in accordance with
Section 11(b) but the Board determines that the exercise of the Rights in
accordance with Section 11(b) above will not afford adequate protection to the
shareholders of the Company and that shareholders should be given an option to
acquire a substitute for the Adjustment Shares, and subject to such limitations
as are necessary to prevent a default under any agreement for money borrowed as
presently constituted to which the Company is a party, then the Board shall: (A)
determine the excess of (1) the value of the Adjustment Shares issuable upon the
exercise of a Right (the "Current Value") over (2) the Purchase Price (such
excess, the "Spread"), and (B) with respect to each Right, make adequate
provision to substitute for, or provide an election to acquire in lieu of, the
Adjustment Shares, upon payment of the applicable Purchase Price (which term
shall include any reduced Purchase Price) any combination of the following
having an aggregate value equal to the Current Value (such aggregate value to be
determined by the Board based upon the advice of a nationally
Exhibit 4 - page 19
<PAGE> 20
recognized investment banking firm selected by the Board: (1) voting and other
securities of one or more subsidiaries of the Company, (2) a reduction in the
Purchase Price, (3) Common Shares and/or other equity securities of the Company
and/or (4) debt securities of the Company and/or cash and other assets;
provided, however, if the Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within thirty (30) days following the
first occurrence of a Triggering Event, then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and without requiring
payment of the Purchase Price, Common Shares (to the extent available) and then,
if necessary, cash, which securities and/or cash in the aggregate are equal to
the Spread. If the Board shall determine in good faith that it is likely that
sufficient additional Common Shares could be authorized for issuance upon
exercise in full of the Rights, the thirty (30) day period set forth above may
be extended to the extent necessary, but not more than ninety (90) days
following the first occurrence of a Triggering Event, in order that the Company
may seek shareholder approval for the authorization of such additional shares
(such period, as it may be extended, the "Substitution Period"). To the extent
that the Board determines that some action need be taken pursuant to the first
and/or second sentences of this Section 11(c)(i), the Company (x) shall provide,
subject to Section 7(e) hereof, that such action shall apply uniformly to all
outstanding Rights, and (y) may suspend the exercisability of the Rights until
the expiration of the Substitution Period in order to seek any authorization of
additional shares and/or to decide the appropriate form of distribution to be
made pursuant to such first sentence and to determine the value thereof. In the
event of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no longer in
effect. For purposes of this Section 11(c)(i), the value of the Common Shares
shall be the current per share market price (as determined pursuant to Section
11(d) hereof) of the Common Shares on the date of the first occurrence of a
Triggering Event.
The provisions of this Section 11(c)(i) shall apply only to
Common Shares of the Company and shall not apply to the securities of any other
Person.
(ii) Exchange Option.
(A) At any time after the occurrence of a Triggering
Event and prior to the earlier of (i) the time any Person, together
with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Shares then outstanding
and (ii) the occurrence of a Section 13(a) Event, the Board may, at its
option, cause the Company to exchange mandatorily all or part of the
then outstanding and exercisable Rights (which shall not include Rights
that shall have become null and void pursuant to the provisions of
Section 7(e) hereof) for consideration per Right consisting of one half
of the securities that would be issuable at such time upon the exercise
of one Right in accordance with Section 11(b) (the consideration
issuable per Right pursuant to this Section 11(c)(ii)(A) being the
"Exchange Consideration"). Any partial exchange shall be effected on a
pro rata basis based on the number of Rights (other than Rights which
have become void pursuant to the provisions of Section 7(e) hereof)
held by each holder of Rights. If the Board elects to exchange all the
Rights for Exchange Consideration pursuant to this Section 11(c)(ii)(A)
prior to the physical distribution of the Rights Certificates, the
Company may distribute the Exchange Consideration in lieu of
distributing Rights Certificates, in which case for purposes of this
Rights Agreement
Exhibit 4 - page 20
<PAGE> 21
holders of Rights shall be deemed to have simultaneously received and
surrendered for exchange Rights Certificates on the date of such
distribution.
(B) Immediately upon the action of the Board ordering
the exchange of any particular Rights pursuant to this Section
11(c)(ii) and without any further action and without any notice, the
right to exercise those particular Rights shall terminate and the only
right a holder shall have thereafter with respect to any of those
particular Rights shall be to receive the Exchange Consideration. The
Company shall promptly give public notice of any such exchange and in
addition, the Company shall promptly mail a notice of any such exchange
to all of the holders of such Rights in accordance with Section 25 of
this Agreement; provided, however, that the failure to give, any delay
in giving or any defect in, such notice shall not affect the validity
of such exchange. Each such notice of exchange will state the method by
which the exchange of the Exchange Consideration for Rights will be
effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. In the event the Exchange Consideration
consists of Common Shares, the Company shall not be required to issue
fractions of Common Shares or to distribute certificates which evidence
fractional Common Shares. In lieu of such fractional Common Shares, the
Company shall pay to the registered holders of the Rights Certificates
with regard to which such fractional Common Shares would otherwise be
issuable an amount in cash equal to the product derived by multiplying
(x) the subject fraction, by (y) the last sale price of the Common
Shares on the fifth Trading Day following the public announcement of
the exchange by the Company, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices on such day,
in either case on a when issued basis (taking into account the
exchange), as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to
trading on the Nasdaq National Market (or, if the Common Shares are not
so listed or traded, then as determined in the manner provided in
Section 11(d)(i) for determining "current per share market price,"
adjusted to take into account the exchange). In determining whether any
particular holder shall be obligated to receive cash in lieu of a
fractional share, the holder shall be entitled to have all Rights
beneficially owned by such holder aggregated so that only one
fractional share shall be attributable to all the Rights so
beneficially owned.
(d) Computation of Current Market Price.
(i) For the purpose of any computation hereunder, other than
computations made pursuant to 11(c)(i) hereof, the "current per share market
price" of the Common Shares on any date shall be deemed to be the average of the
daily closing prices per share of such Common Shares for the 30 consecutive
Trading Days (as such term is hereinafter defined) immediately prior to such
date and for purposes of computations made pursuant to Section 11(c)(i) hereof,
the "current per share market price" of the Common Shares on any date shall be
deemed to be the average of the daily closing prices per Common Share for the 10
consecutive Trading Days immediately following such date; provided, however,
that in the event that the current per share market price of the Common Shares
is determined during a period following the announcement by the issuer of such
Common Shares of (A) a dividend or distribution on such Common Shares payable in
such Common Shares or securities convertible into such Common Shares, or (B) any
subdivision, combination or reclassification of such Common Shares, and prior to
the expiration
Exhibit 4 - page 21
<PAGE> 22
of the requisite 30 or 10 Trading Day period, as the case may be, after the
ex-dividend date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and in each such case, the
current market price shall be appropriately adjusted to reflect the current
market price per Common Share equivalent. The closing price for each day shall
be the last sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange (the "NYSE") or, if the Common Shares are not listed or admitted
to trading on the NYSE, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Common Shares are listed or admitted to trading
or, if the Common Shares are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as reported by
the National Association of Securities Dealers, Inc. Automated Quotations
("Nasdaq") system or such other system then in use, or, if on any such date the
Common Shares are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in the Common Shares selected by the Board. If on any such date no
market maker is making a market in the GGD Stock, the GTR Stock, the GMO Stock
or the GSP Stock, the fair value of such shares on such date as determined in
good faith by the Board shall be used. The term "Trading Day" shall mean a day
on which the principal national securities exchange on which the Common Shares
are listed or admitted to trading is open for the transaction of business or, if
the Common Shares are not listed or admitted to trading on any national
securities exchange, a Business Day. If the Common Shares are not publicly held
or not so listed or traded, "current market price" per share shall mean the fair
value per share as determined in good faith by the Board, whose determination
shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares shall be determined in
the same manner as set forth above for Common Shares in Section 11(d)(i) (other
than the last sentence thereof). If the current per share market price of the
Preferred Shares of any series cannot be determined in the manner provided
above, the "current per share market price" of the shares of Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred
Stock shall be conclusively deemed to be the current per share market price of
the shares of GGD Stock, GTR Stock, GMO Stock and GSP Stock, respectively
(appropriately adjusted to reflect any stock splits, stock dividends,
recapitalizations or similar transactions occurring after the date hereof),
multiplied by one hundred. If neither the applicable Common Shares nor the
applicable Preferred Shares are publicly held or so listed or traded, "current
per share market price" shall mean the fair value per share as determined in
good faith by the Board, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes.
(e) Certain Covenants. The Company covenants and agrees that, after the
Distribution Date, it:
Exhibit 4 - page 22
<PAGE> 23
(i) will not, and shall not permit any Subsidiary to, (i)
consolidate with, (ii) merge with or into, or (iii) sell or transfer, in one or
more transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to, any other Person if at the time of or immediately after such consolidation,
merger or sale there are any rights, warrants or other instruments or securities
outstanding or agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights.
(ii) will not, except as permitted by Section 23 or Section 26
hereof, take (or permit any Subsidiary to take) any action which at the time it
is reasonably foreseeable will diminish substantially or otherwise eliminate the
benefits intended to be afforded by the Rights, provided, however, that the
issuance of additional Rights pursuant hereto, including by action of the Board
under Section 22 hereof, shall not be deemed to violate this Section 11(e)(ii).
Section 12. Certificate of Adjustment. Whenever an adjustment is made
as provided in Sections 11 and 13 hereof, the Company shall promptly (a) prepare
a certificate setting forth such adjustment, and a brief statement of the facts
accounting for such adjustment, (b) promptly file with the Rights Agent and with
each transfer agent for the Common Shares or the Preferred Shares a copy of such
certificate and (c) mail a brief summary thereof to each holder of a Right
Certificate in accordance with Section 25 hereof. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment therein
contained and shall not be deemed to have knowledge of any such adjustment
unless and until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event that, following the Distribution Date, directly or
indirectly, any transactions specified in the following clause (i), (ii) or
(iii) of this Section 13(a) shall be consummated:
(i) the Company shall consolidate with, or merge with and
into, any other Person and the Company shall not be the continuing or surviving
corporation of any such consolidation or merger;
(ii) any Person shall consolidate with the Company, or merge
with and into the Company and the Company shall be the continuing or surviving
corporation of such merger and, in connection with such merger, all or part of
the Common Shares shall be changed into or exchanged for stock or other
securities of any other Person (or the Company) or cash or any other property;
or
(iii) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons other than the Company or any Subsidiary of the Company;
provided, however, that this clause (iii) of Section 13(a) hereof shall not
apply to the pro rata distribution by the Company of assets (including
securities) of the Company or any of its Subsidiaries to all holders of Common
Shares of the Company in accordance with each such holder's interest in such
assets prior to the distribution;
Exhibit 4 - page 23
<PAGE> 24
then, and in each such case, proper provision shall be made so that (i) each
holder of a Right (except as otherwise provided herein) shall thereafter have
the right to receive, upon the exercise thereof in accordance with the terms of
this Agreement, such number of validly authorized and issued, fully paid,
non-assessable and freely tradable Common Shares of the Principal Party (as
hereinafter defined), not subject to any rights of first refusal, redemption or
repurchase, as shall be equal to the result obtained by (1) multiplying the then
current Purchase Price by the number of one one-hundredths of a Preferred Share
for which a Right is then exercisable immediately prior to the first occurrence
of any of the events described in clauses (i), (ii) or (iii) of this Section
13(a) (a "Section 13(a) Event"), or, if a Triggering Event has occurred prior to
the Section 13(a) Event, multiplying the number of such fractional shares for
which a Right was exercisable immediately prior to the Triggering Event hereof
by the Purchase Price immediately prior to such Triggering Event, and dividing
that product (which, following the Section 13(a) Event, shall thereafter be
referred to as the "Purchase Price" for all purposes of this Agreement) by (2)
50% of the then current per share market price of the Common Shares of such
other Person (determined pursuant to Section 11(d)) on the date of consummation
of such consolidation, merger, sale or transfer; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such consolidation,
merger, sale or transfer, all the obligations and duties of the Company pursuant
to this Agreement; (iii) the term "Company" shall thereafter be deemed to refer
to such issuer, it being specifically intended that the provisions of Section 11
hereof shall apply only to such Principal Party following the first occurrence
of a Section 13(a) Event; (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number of its
Common Shares in accordance with Section 9 hereof) in connection with such
consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
Common Shares thereafter deliverable upon the exercise of the Rights; and (v)
the provisions of Sections 11(b) and 11(c)(i) hereof shall thereafter be of no
effect following the first occurrence of a Section 13(a) Event. The Company
shall not enter into any transaction of the kind referred to in this Section
13(a) if at the time of such transaction there are any rights, warrants,
instruments or securities outstanding or any agreements or arrangements which,
as a result of the consummation of such transaction, would substantially
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (i) or
(ii) of the first sentence of Section 13(a), the Person that is the issuer of
any securities into which Common Shares of the Company are converted in such
merger or consolidation, and if no securities are so issued, the Person that is
the other party to such merger or consolidation; and
(ii) in the case of any transaction described in clause (iii)
of the first sentence of Section 13(a), the Person that is the party receiving
the greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions;
provided, however, that in any such case, (1) if the Common Shares of such
Person are not at such time and have not been continuously over the preceding
twelve (12) month period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of another Person the Common
Shares of which are and have been so registered,
Exhibit 4 - page 24
<PAGE> 25
"Principal Party" shall refer to such other Person; and (2) in case such Person
is a Subsidiary, directly or indirectly, of more than one Person, the Common
Shares of two or more of which are and have been so registered, "Principal
Party" shall refer to whichever of such Persons is the issuer of the Common
Shares having the greatest aggregate market value.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number of
authorized Common Shares, which have not been issued or reserved for issuance,
to permit the exercise in full of the Rights in accordance with this Section 13
and unless prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement providing
for the terms set forth in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any consolidation,
merger or sale of assets mentioned in paragraph (a) of this Section 13, the
Principal Party will:
(i) prepare and file a registration statement under the Act,
with respect to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as practicable after such
filing and (B) remain effective (with a prospectus at all times meeting the
requirements of the Act) until the Final Expiration Date; and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply in
all respects with the requirements for registration on Form 10 under the
Exchange Act.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event that one of
the transactions described in Section 13(a) hereof shall occur at any time after
the occurrence of a Triggering Event, the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner described in Section
13(a).
(d) Notwithstanding any other provision of this Agreement, no
adjustment to the number or kind of shares (or fractions of a share), cash or
other property for which a Right is exercisable or the number of Rights
outstanding or associated with any Common Share or any similar or other
adjustment shall be made or be effective if such adjustment would have the
effect of reducing or limiting the benefits the holders of the Rights would have
had absent such adjustment, including, without limitation, the benefits under
Sections 11 and 13, unless the terms of this Agreement are amended so as to
preserve such benefits, provided that this paragraph shall not prevent any
change prior to the Distribution Date permitted by Section 26(a) and provided
that this Section 13(d) shall not be deemed to limit or impair the right to
engage in an exchange pursuant to Section 11(c)(ii).
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights
except prior to the Distribution Date as the Board may in its discretion
determine in effecting an adjustment in the number of Rights pursuant to Section
11(a ) hereof, or to distribute Right Certificates which evidence fractional
Rights. In lieu of such fractional Rights, there shall be paid to the registered
Exhibit 4 - page 25
<PAGE> 26
holders of the Right Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section 14(a),
the current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for any
day shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the NYSE or,
if the Rights are not listed or admitted to trading on the NYSE, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by Nasdaq or such other system then in use
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board. If on any such
date no such market maker is making a market in the Rights the fair value of the
Rights on such date as determined in good faith by the Board shall be used.
(b) The Company shall not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one one-hundredth
of a Preferred Share) upon exercise of the Rights or to distribute certificates
which evidence fractional Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-hundredth of a Preferred Share
may, at the election of the Company, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a depositary
selected by it, provided that such agreement shall provide that the holders of
such depositary receipts shall have all the rights, privileges and preferences
to which they are entitled as beneficial owners of the Preferred Shares
represented by such depositary receipts. In lieu of fractional Preferred Shares
that are not integral multiples of one one-hundredth of a Preferred Share, the
Company shall pay to the registered holders of Right Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one Preferred Share. For purposes of
this Section 14(b), the current market value of a Preferred Share shall be the
closing price of a Preferred Share (as determined pursuant to the second
sentence of Section 11(d)(ii) hereof) for the Trading Day immediately prior to
the date of such exercise.
(c) Following the occurrence of a Triggering Event, the Company shall
not be required to issue fractions of Common Shares upon exercise of the Rights
or to distribute certificates that evidence fractional Common Shares. In lieu of
fractional Common Shares, the Company may pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one Common
Share. For purposes of this Section 14(c), the current market value of one
Common Share shall be the closing price of one Common Share (as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
Exhibit 4 - page 26
<PAGE> 27
(d) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Sections 18 and 20 hereof, are vested in the respective registered holders of
the Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares), without
the consent of the Rights Agent or of the holder of any other Right Certificate
(or, prior to the Distribution Date, of the Common Shares), may, in his own
behalf and for his own benefit, enforce, and institute and maintain any suit,
action or proceeding against the Company to enforce, or otherwise act in respect
of, his right to exercise the Rights evidenced by such Right Certificate in the
manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person subject to this
Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligation.
Exhibit 4 - page 27
<PAGE> 28
Section 17. Right Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 24 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, or expense, incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim of
liability which may arise under this Agreement. The indemnity provided herein
shall survive the expiration of the Rights and the termination of this Rights
Agreement.
(b) The Rights Agent shall be fully indemnified against, shall be
protected from and shall incur no liability or expense for, or in respect of any
action taken, suffered or omitted by it in connection with, its administration
of this Agreement in reliance upon any Right Certificate or certificate for the
Preferred Shares or Common Shares or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper person or persons, or
otherwise upon the advice of counsel as set forth in Section 20 hereof. Such
indemnity shall specifically include any loss, liability or expense which the
Rights Agent may suffer in administering this Agreement against a Person who was
an Acquiring Person or an Affiliate or an Associate of an Acquiring Person and
any costs and expenses of defending against any claim of liability from such
Person, Acquiring Person or Affiliate or Associate of such Acquiring Person.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
Exhibit 4 - page 28
<PAGE> 29
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that such corporation would be eligible for appointment
as a successor Rights Agent under the provisions of Section 21 hereof. In case
at the time such successor Rights Agent shall succeed to the agency created by
this Agreement, any of the Right Certificates shall have been countersigned but
not delivered, any such successor Rights Agent may adopt the countersignature of
the predecessor Rights Agent and deliver such Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall not
have been countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
President, any Vice President, the Treasurer or the Clerk of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
Exhibit 4 - page 29
<PAGE> 30
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 11(b) hereof) or any adjustment in the
terms of the Rights (including the manner, method or amount thereof) provided
for in Sections 3, 11, 13 or 23, or the ascertaining of the existence of facts
that would require any such change or adjustment (except with respect to the
exercise of Rights evidenced by Right Certificates after receipt of a
certificate furnished pursuant to Section 13 describing such change or
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
Preferred Shares to be issued pursuant to this Agreement or any Right
Certificate or as to whether any Preferred Shares will, when issued, be validly
authorized and issued, fully paid and non-assessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the President, any Vice President, the Clerk
or the Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer or for any delay in acting while waiting for
those instructions. Any application by the Rights Agent for written instructions
from the Company may, at the option of the Rights Agent, set forth in writing
any action proposed to be taken or omitted by the Rights Agent under this Rights
Agreement and the date on or after which such action shall be taken or such
omission shall be effective. The Rights Agent shall not be liable for any action
taken by, or omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date specified in such
application (which date shall not be less than five Business Days after the date
any officer of the Company actually receives such application, unless any such
officer shall have consented in writing to an earlier date) unless, prior to
taking any such action (or the specified effective date in the case of an
omission), the Rights Agent shall have received written instructions in response
to such application specifying the action to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become peculiarly interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the
Exhibit 4 - page 30
<PAGE> 31
Rights Agent shall not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any loss to the
Company resulting from any such act, default, neglect or misconduct, provided
reasonable care was exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 and/or 2 on such
certificate attached to the form of assignment or form of election to purchase,
the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Shares or Preferred Shares by registered or certified mail, and to
the holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Shares or Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States or
of any other state of the United States in good standing, which is authorized
under such laws to exercise corporate trust powers and is subject to supervision
or examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $50
million. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Shares
or Preferred Shares, and mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the
Exhibit 4 - page 31
<PAGE> 32
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board to reflect any adjustment or change in the
Purchase Price and the number or kind or class of shares or other securities or
property purchasable under the Right Certificates made in accordance with the
provisions of this Agreement. In addition, the Company may, if deemed necessary
or appropriate by the Board, issue Right Certificates in connection with the
issuance or sale of Common Shares following the Distribution Date.
Section 23. Redemption.
(a) (i) The Board may, at its option, at any time prior to 5:00 p.m.,
Massachusetts time, on the earlier of (A) the tenth day following the Shares
Acquisition Date (or such later date as may be determined by the Board) or (B)
the Final Expiration Date, redeem all but not less than all the then outstanding
Rights at a redemption price of $.001 per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof (such redemption price being hereinafter referred to as the
"Redemption Price"). Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable pursuant to Section 11(b) or 11(c)
at a time when the Rights are then redeemable hereunder.
(ii) Following the occurrence of a Shares Acquisition Date but
prior to any event described in Section 13(a), the Board may redeem all but not
less than all of the then outstanding Rights at the Redemption Price in
connection with any event, not involving an Acquiring Person or an Affiliate or
Associate of an Acquiring Person, that either (A) is of the type specified in
Section 13(a) or (B) involves a Person merging into the Company or otherwise
combining with the Company, where the Company shall be the continuing or
surviving corporation of such merger or combination and the Common Shares of the
Company shall remain outstanding and not changed into or exchanged for stock or
other securities of any other Person or the Company or cash or any other
property,
(b) In the case of a redemption permitted under Section 23(a),
immediately upon the action of the Board ordering the redemption of the Rights,
evidence of which shall have been filed with the Rights Agent and without any
further action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall be to
receive the Redemption Price. Within ten days after the action of the Company
ordering the redemption of the Rights, the Company shall give notice of such
redemption to the holders of the then outstanding Rights by mailing such notice
to all such holders at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the Transfer Agent for the Common Shares. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption shall state the method by
which the payment of the Redemption Price will be made.
Exhibit 4 - page 32
<PAGE> 33
Section 24. Notice of Certain Events. In case the Company shall
propose, at any time after the Distribution Date, (a) to pay any dividend
payable in stock of any class to the holders of its Preferred Shares or to make
any other distribution to the holders of its Preferred Shares (other than a
regular quarterly cash dividend) or (b) to offer to the holders of its Preferred
Shares rights or warrants to subscribe for or to purchase any additional
Preferred Shares or shares of stock of any class or any other securities, rights
or options, or (c) to effect any reclassification of its Preferred Shares (other
than a reclassification involving only the subdivision of outstanding Preferred
Shares), or (d) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of 50% or more
of the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person, or (e) to effect the liquidation, dissolution or
winding up of the Company, or (f) to declare or pay any dividend on any series
of Common Shares payable in Common Shares of the same series or to effect a
subdivision, combination or consolidation of any series of Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares on
the Common Shares of the same series), then, in each such case, the Company
shall give to each holder of a Right Certificate, in accordance with Section 25
hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such stock dividend, or distribution of rights or warrants,
or the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take place and the date
of participation therein by the holders of the Common Shares and/or Preferred
Shares, if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (a) or (b) above at least 20 days prior
to the record date for determining holders of the Preferred Shares for purposes
of such action, and in the case of any such other action, at least 20 days prior
to the date of the taking of such proposed action or the date of participation
therein by the holders of the Common Shares and/or Preferred Shares, whichever
shall be the earlier.
In case any Triggering Event or Section 13(a) Event shall occur, then,
in any such case, (i) the Company shall as soon as practicable thereafter give
to each holder of a Right Certificate, in accordance with Section 25 hereof, a
notice of the occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Section 11 or 13 hereof,
and (ii) all references in the preceding paragraph to Preferred Shares shall be
deemed thereafter to refer to Common Shares and/or, if appropriate, other
securities.
Section 25. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Genzyme Corporation
One Kendall Square
Cambridge, MA 02139
Attention: Chief Legal Officer
With a copy to: Maureen Manning, Esquire
Palmer & Dodge LLP
One Beacon Street
Exhibit 4 - page 33
<PAGE> 34
Boston, MA 02108
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
Ms. Carolyn O'Neill
American Stock Transfer & Trust Company
6201 15th Avenue
Brooklyn, New York 11219
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 26. Supplements and Amendments.
(a) Prior to the Distribution Date, the Company and the Rights Agent
shall, if the Company so directs, supplement or amend any provision of this
Agreement without the approval of any holders of certificates representing
Common Shares.
(b) From and after the Distribution Date, the Company and the Rights
Agent shall, if the Company shall so direct, supplement or amend this Agreement
without the approval of any holders of Right Certificates in order (i) to cure
any ambiguity, (ii) to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions herein, (iii)
to extend the period of redemption provided in Section 23 hereof (which
amendment shall set forth a date after which the Rights are no longer redeemable
("Extension Date") unless the Rights are further amended prior to the Extension
Date to further extend the time during which the Rights are redeemable, and
which amendment may provide for the termination of the right of redemption prior
to any Extension Date), or (iv) to change or supplement the provisions hereunder
in any manner which the Company may deem necessary or desirable and which shall
not adversely affect the interests of the holders of Right Certificates (other
than an Acquiring Person or an Affiliate or Associate of an Acquiring Person),
provided, this Agreement may not be supplemented or amended pursuant to clause
(iii) of this sentence after the period for redemption of the Rights pursuant to
Section 23 hereof shall have expired.
(c) Upon the delivery of a certificate from an appropriate officer of
the Company, which states that the proposed supplement or amendment is in
compliance with the terms of this Section 26, the Rights Agent shall execute
such supplement or amendment. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be made which
changes the redemption price or the number of shares of Common Stock of the
Company for which a Right is exercisable. Prior to the Distribution Date, the
interests of the holders of GGD Stock Rights, GTR Stock Rights, GMO Stock Rights
and GSP Stock Rights shall be deemed coincident with the interests of the
holders of GGD Stock, GTR Stock, GMO Stock and GSP Stock, respectively.
Exhibit 4 - page 34
<PAGE> 35
Section 27. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 28. Determinations and Actions by the Board of Directors. The
Board shall have the exclusive power and authority to administer this Agreement
and to exercise all rights and powers specifically granted to the Board or the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Agreement and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend the Agreement). All
such actions, calculations, interpretations and determinations (including, for
purposes of clause (ii) below, all omissions with respect to the foregoing)
which are done or made by the Board in good faith, shall (i) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Right Certificates and all other parties, and (ii) not subject the Board to any
liability to the holders of the Right Certificates.
Section 29. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Shares) any legal or equitable right, remedy
or claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the Common Shares).
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, notwithstanding anything in this Agreement to the contrary,
if any such term, provision, covenant or restriction is held by such court or
authority to be invalid, void or unenforceable and the Board determines in its
good faith judgment that severing the invalid language from this Agreement would
adversely affect the purpose or effect of this Agreement, the right of
redemption set forth in Section 23 hereof shall be reinstated and shall not
expire until the close of business on the tenth day following the date of such
determination by the Board.
Section 31. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
Commonwealth of Massachusetts and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
Section 32. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
Exhibit 4 - page 35
<PAGE> 36
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
[CORPORATE SEAL] GENZYME CORPORATION
Attest
By: /s/ Gerald E. Quirk By: /s/ Peter Wirth
------------------------------- ---------------------------------
Name: Gerald E. Quirk Name: Peter Wirth
Title: Assistant Clerk Title: Executive Vice President
[CORPORATE SEAL] AMERICAN STOCK TRANSFER & TRUST
COMPANY
Attest
By: /s/ Susan Silber By: /s/ Herbert J. Lemmer
------------------------------- ---------------------------------
Name: Susan Silber Name: Herbert J. Lemmer
Title: Assistant Secretary Title: Vice President
Exhibit 4 - page 36
<PAGE> 37
EXHIBIT A -- CERTIFICATE OF DESIGNATIONS
TERMS OF THE
SERIES A, SERIES B, SERIES C AND SERIES D JUNIOR PARTICIPATING PREFERRED STOCK
OF
GENZYME CORPORATION
VOTED, that pursuant to paragraph IV.F.1 of this Corporation's Articles
of Organization, the Board of Directors hereby establishes four series of
Preferred Stock of the Corporation with the following designations, powers,
preferences and rights:
A. Authorized Amounts and Designations. Two million shares of Preferred
Stock of the Corporation are designated as Series A Junior Participating
Preferred Stock (the "Series A Preferred Stock"), 400,000 shares of Preferred
Stock are designated as Series B Junior Participating Preferred Stock (the
"Series B Preferred Stock"), 400,000 shares of Preferred Stock are designated as
Series C Junior Participating Preferred Stock (the "Series C Preferred Stock,")
and 600,000 shares of Preferred Stock are designated as Series D Junior
Preferred Stock (the "Series D Preferred Stock" and, together with the Series A
Preferred Stock, the Series B Preferred Stock, the Series C Preferred Stock and
any other series of Preferred Stock so designated by the Corporation's Board of
Directors, the "Junior Preferred Stock"). To the extent legally permitted, such
numbers of shares may be increased or decreased by vote of the Board of
Directors, provided that no decrease shall reduce the number of shares of Junior
Preferred Stock of any series to a number less than the number of shares of such
series then outstanding plus the number of shares of such series reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation
convertible into such series of Junior Preferred Stock.
B. Series A Preferred Stock. A description of the Series A Preferred
Stock and a statement of its preferences, voting powers, qualifications and
special or relative rights or privileges is as follows:
1. Dividends and Distributions.
a. Subject to the prior and superior rights of the
holders of any shares of any series of Preferred Stock ranking prior and
superior to the Series A Preferred Stock with respect to dividends, the holders
of shares of Series A Preferred Stock, in preference to the holders of all
shares of common stock of the Corporation (the "Common Shares"), and of any
other junior stock, shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the first day of March, June, September and
December in each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of Series A Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $1.00 or (b) subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all cash dividends, and 100
times the aggregate per share amount (payable in kind) of all non-cash
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dividends or other distributions, other than a dividend on shares of Genzyme
General Division Common Stock (the "GGD Stock") payable in shares of GGD Stock
or a subdivision of the outstanding shares of GGD Stock (by reclassification or
otherwise), declared on the GGD Stock since the immediately preceding Quarterly
Dividend Payment Date or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of Series A
Preferred Stock. In the event the Corporation shall at any time after June 12,
1997 declare or pay any dividend on shares of GGD Stock payable in shares of GGD
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of GGD Stock (by reclassification or otherwise than by
payment of a dividend in shares of GGD Stock) into a greater or lesser number of
shares of GGD Stock, then in each such case the amount to which holders of
shares of Series A Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of GGD
Stock outstanding immediately after such event and the denominator of which is
the number of shares of GGD Stock that were outstanding immediately prior to
such event.
b. The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in paragraph a. of this
Section B.1 immediately after it declares a dividend or distribution on any
shares of GGD Stock (other than a dividend payable in shares of GGD Stock),
provided that, in the event no dividend or distribution shall have been declared
on the GGD Stock during the period between any Quarterly Dividend Payment Date
and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
c. Dividends shall begin to accrue and be cumulative
on outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares, unless the date of
issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the date
fixed for the payment thereof.
2. Voting Rights. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
a. Subject to the provision for adjustment
hereinafter set forth, each share of Series A Preferred Stock shall entitle the
holder thereof to 100 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at
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any time after June 12, 1997 declare or pay any dividend on any shares of GGD
Stock payable in shares of GGD Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of GGD Stock (by reclassification or
otherwise than by payment of a dividend in shares of GGD Stock) into a greater
or lesser number of shares of GGD Stock, then in each such case the number of
votes per share to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares of GGD
Stock outstanding immediately after such event and the denominator of which is
the number of shares of GGD Stock that were outstanding immediately prior to
such event.
b. Except as otherwise provided herein, in the
Articles of Organization, in any other vote of the Board of Directors of the
Corporation creating a series of Preferred Stock, or by law, the holders of
shares of Series A Preferred Stock and the holders of Common Shares and any
other capital stock of the Corporation having general voting rights shall vote
together as one series on all matters submitted to a vote of stockholders of the
Corporation.
c. Except as set forth herein or as otherwise
provided by law, holders of Series A Preferred Stock shall have no voting
rights.
3. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series A
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
GGD Stock, or (2) to the holders of shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up) with the Series
A Preferred Stock, except distributions made ratably on the Series A Preferred
Stock and all other such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time after
June 12, 1997 declare or pay any dividend on shares of GGD Stock payable in
shares of GGD Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of GGD Stock (by reclassification or otherwise than by
payment of a dividend in shares of GGD Stock) into a greater or lesser number of
shares of GGD Stock, then in each such case the aggregate amount to which
holders of shares of Series A Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of GGD Stock outstanding immediately after such event and the
denominator of which is the number of shares of GGD Stock that were outstanding
immediately prior to such event.
4. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
Common Shares are exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case each share of Series A
Preferred Stock shall at the same time be similarly exchanged or
A-3
<PAGE> 40
changed into an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of GGD Stock is changed or exchanged. In
the event the Corporation shall at any time after June 12, 1997 declare or pay
any dividend on any shares of GGD Stock payable in shares of GGD Stock, or
effect a subdivision or combination or consolidation of the outstanding shares
of GGD Stock (by reclassification or otherwise than by payment of a dividend in
shares of GGD Stock) into a greater or lesser number of shares of GGD Stock,
then in each such case the amount set forth in the preceding sentence with
respect to the exchange or change of shares of Series A Preferred Stock shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of GGD Stock outstanding immediately after such event and the
denominator of which is the number of shares of GGD Stock that were outstanding
immediately prior to such event.
C. Series B Preferred Stock. A description of the Series B Preferred
Stock and a statement of its preferences, voting powers, qualifications and
special or relative rights or privileges is as follows:
1. Dividends and Distributions.
a. Subject to the prior and superior rights of the
holders of any shares of any series of Preferred Stock ranking prior and
superior to the Series B Preferred Stock with respect to dividends, the holders
of shares of Series B Preferred Stock, in preference to the holders of all
Common Shares, and of any other junior stock, shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the first day
of March, June, September and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series B Preferred Stock, in an amount per share (rounded
to the nearest cent) equal to the greater of (a) $1.00 or (b) subject to the
provision for adjustment hereinafter set forth, 100 times the aggregate per
share amount of all cash dividends, and 100 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions, other than a
dividend on shares of Genzyme Tissue Repair Division Common Stock (the "GTR
Stock") payable in shares of GTR Stock or a subdivision of the outstanding
shares of GTR Stock (by reclassification or otherwise), declared on the GTR
Stock since the immediately preceding Quarterly Dividend Payment Date or, with
respect to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series B Preferred Stock. In the event
the Corporation shall at any time after June 12, 1997 declare or pay any
dividend on any shares of GTR Stock payable in shares of GTR Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of GTR
Stock (by reclassification or otherwise than by payment of a dividend in shares
of GTR Stock) into a greater or lesser number of shares of GTR Stock, then in
each such case the amount to which holders of shares of Series B Preferred Stock
were entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of GTR Stock outstanding immediately
after such event and the denominator of which is the number of shares of GTR
Stock that were outstanding immediately prior to such event.
A-4
<PAGE> 41
b. The Corporation shall declare a dividend or
distribution on the Series B Preferred Stock as provided in paragraph a. of this
Section C.1 immediately after it declares a dividend or distribution on any
shares of GTR Stock (other than a dividend payable in shares of GTR Stock),
provided that, in the event no dividend or distribution shall have been declared
on the GTR Stock during the period between any Quarterly Dividend Payment Date
and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Series B Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
c. Dividends shall begin to accrue and be cumulative
on outstanding shares of Series B Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares, unless the date of
issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series B Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series B Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series B Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the date
fixed for the payment thereof.
2. Voting Rights. The holders of shares of Series B Preferred
Stock shall have the following voting rights:
a. Subject to the provision for adjustment
hereinafter set forth, each share of Series B Preferred Stock shall entitle the
holder thereof to 100 times the number of votes to which the holder of each
outstanding share of GTR Stock is then entitled on all matters submitted to a
vote of the stockholders of the Corporation. In the event the Corporation shall
at any time after June 12, 1997 declare or pay any dividend on shares of GTR
Stock payable in shares of GTR Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of GTR Stock (by reclassification or
otherwise than by payment of a dividend in shares of GTR Stock) into a greater
or lesser number of shares of GTR Stock, then in each such case the number of
votes per share to which holders of shares of Series B Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares of GTR
Stock outstanding immediately after such event and the denominator of which is
the number of shares of GTR Stock that were outstanding immediately prior to
such event.
b. Except as otherwise provided herein, in the
Articles of Organization, in any other vote of the Board of Directors of the
Corporation creating a series of Preferred Stock, or by law, the holders of
shares of Series B Preferred Stock and the holders of Common Shares and any
other capital stock of the Corporation having general voting rights shall vote
together as one series on all matters submitted to a vote of stockholders of the
Corporation.
A-5
<PAGE> 42
c. Except as set forth herein or as otherwise
provided by law, holders of Series B Preferred Stock shall have no voting
rights.
3. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series B
Preferred Stock unless, prior thereto, the holders of shares of Series B
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series B
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
GTR Stock, or (2) to the holders of shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up) with the Series
B Preferred Stock, except distributions made ratably on the Series B Preferred
Stock and all other such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time after
June 12, 1997 declare or pay any dividend on any shares of GTR Stock payable in
shares of GTR Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of GTR Stock (by reclassification or otherwise than by
payment of a dividend in shares of GTR Stock) into a greater or lesser number of
shares of GTR Stock, then in each such case the aggregate amount to which
holders of shares of Series B Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of GTR Stock outstanding immediately after such event and the
denominator of which is the number of shares of GTR Stock that were outstanding
immediately prior to such event.
4. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
Common Shares are exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case each share of Series B
Preferred Stock shall at the same time be similarly exchanged or changed into an
amount per share (subject to the provision for adjustment hereinafter set forth)
equal to 100 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for which
each share of GTR Stock is changed or exchanged. In the event the Corporation
shall at any time after June 12, 1997 declare or pay any dividend on any shares
of GTR Stock payable in shares of GTR Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of GTR Stock (by
reclassification or otherwise than by payment of a dividend in shares of GTR
Stock) into a greater or lesser number of shares of GTR Stock, then in each such
case the amount set forth in the preceding sentence with respect to the exchange
or change of shares of Series B Preferred Stock shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number of shares of GTR
Stock outstanding immediately after such event and the denominator of which is
the number of shares of GTR Stock that were outstanding immediately prior to
such event.
A-6
<PAGE> 43
D. Series C Preferred Stock. A description of the Series C Preferred
Stock and a statement of its preferences, voting powers, qualifications and
special or relative rights or privileges is as follows:
1. Dividends and Distributions.
a. Subject to the prior and superior rights of the
holders of any shares of any series of Preferred Stock ranking prior and
superior to the Series C Preferred Stock with respect to dividends, the holders
of shares of Series C Preferred Stock, in preference to the holders of Common
Shares, and of any other junior stock, shall be entitled to receive, when, as
and if declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the first day of March, June,
September and December in each year (each such date being referred to herein as
a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series C Preferred Stock, in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $1.00 or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions, other than a dividend on shares of
Genzyme Molecular Oncology Division Common Stock (the "GMO Stock") payable in
shares of GMO Stock or a subdivision of the outstanding shares of GMO Stock (by
reclassification or otherwise), declared on the GMO Stock since the immediately
preceding Quarterly Dividend Payment Date or, with respect to the first
Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series C Preferred Stock. In the event the Corporation
shall at any time after June 12, 1997 declare or pay any dividend on any shares
of GMO Stock payable in shares of GMO Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of GMO Stock (by
reclassification or otherwise than by payment of a dividend in shares of GMO
Stock) into a greater or lesser number of shares of GMO Stock, then in each such
case the amount to which holders of shares of Series C Preferred Stock were
entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of GMO Stock outstanding immediately
after such event and the denominator of which is the number of shares of GMO
Stock that were outstanding immediately prior to such event.
b. The Corporation shall declare a dividend or
distribution on the Series C Preferred Stock as provided in paragraph a. of this
Section C.1 immediately after it declares a dividend or distribution on any
shares of GMO Stock (other than a dividend payable in shares of GMO Stock),
provided that, in the event no dividend or distribution shall have been declared
on the GMO Stock during the period between any Quarterly Dividend Payment Date
and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Series C Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
c. Dividends shall begin to accrue and be cumulative
on outstanding shares of Series C Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares, unless the date of
issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
A-7
<PAGE> 44
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series C Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series C Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series C Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the date
fixed for the payment thereof.
2. Voting Rights. The holders of shares of Series C Preferred
Stock shall have the following voting rights:
a. Subject to the provision for adjustment
hereinafter set forth, each share of Series C Preferred Stock shall entitle the
holder thereof to 100 times the number of votes to which the holder of each
outstanding share of GMO Stock is then entitled on all matters submitted to a
vote of the stockholders of the Corporation. In the event the Corporation shall
at any time after June 12, 1997 declare or pay any dividend on any shares of GMO
Stock payable in shares of GMO Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of GMO Stock (by reclassification or
otherwise than by payment of a dividend in shares of GMO Stock) into a greater
or lesser number of shares of GMO Stock, then in each such case the number of
votes per share to which holders of shares of Series C Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares of GMO
Stock outstanding immediately after such event and the denominator of which is
the number of shares of GMO Stock that were outstanding immediately prior to
such event.
b. Except as otherwise provided herein, in the
Articles of Organization, in any other vote of the Board of Directors of the
Corporation creating a series of Preferred Stock, or by law, the holders of
shares of Series C Preferred Stock and the holders of Common Shares and any
other capital stock of the Corporation having general voting rights shall vote
together as one series on all matters submitted to a vote of stockholders of the
Corporation.
c. Except as set forth herein or as otherwise
provided by law, holders of Series C Preferred Stock shall have no voting
rights.
3. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series C
Preferred Stock unless, prior thereto, the holders of shares of Series C
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series C
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
GMO Stock, or
A-8
<PAGE> 45
(2) to the holders of shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series C
Preferred Stock, except distributions made ratably on the Series C Preferred
Stock and all other such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time after
June 12, 1997 declare or pay any dividend on any shares of GMO Stock payable in
shares of GMO Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of GMO Stock (by reclassification or otherwise than by
payment of a dividend in shares of GMO Stock) into a greater or lesser number of
shares of GMO Stock, then in each such case the aggregate amount to which
holders of shares of Series C Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of GMO Stock outstanding immediately after such event and the
denominator of which is the number of shares of GMO Stock that were outstanding
immediately prior to such event.
4. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
Common Shares are exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case each share of Series C
Preferred Stock shall at the same time be similarly exchanged or changed into an
amount per share (subject to the provision for adjustment hereinafter set forth)
equal to 100 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for which
each share of GMO Stock is changed or exchanged. In the event the Corporation
shall at any time after June 12, 1997 declare or pay any dividend on shares of
GMO Stock payable in shares of GMO Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of GMO Stock (by reclassification or
otherwise than by payment of a dividend in shares of GMO Stock) into a greater
or lesser number of shares of GMO Stock, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change of shares
of Series C Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of GMO Stock
outstanding immediately after such event and the denominator of which is the
number of shares of GMO Stock that were outstanding immediately prior to such
event.
E. Series D Preferred Stock. A description of the Series D Preferred
Stock and a statement of its preferences, voting powers, qualifications and
special or relative rights or privileges is as follows:
1. Dividends and Distributions.
a. Subject to the prior and superior rights of the
holders of any shares of any series of Preferred Stock ranking prior and
superior to the Series D Preferred Stock with respect to dividends, the holders
of shares of Series D Preferred Stock, in preference to the holders of Common
Shares, and of any other junior stock, shall be entitled to receive, when, as
and if declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the first day of March, June,
September and December in each year (each such date being referred to herein as
a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a
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<PAGE> 46
share of Series D Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $1.00 or (b) subject to the provision
for adjustment hereinafter set forth, 100 times the aggregate per share amount
of all cash dividends, and 100 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions, other than a dividend on
shares of Genzyme Surgical Products Division Common Stock (the "GSP Stock")
payable in shares of GSP Stock or a subdivision of the outstanding shares of GSP
Stock (by reclassification or otherwise), declared on the GSP Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series D Preferred Stock. In the event the Corporation
shall at any time after May 26, 1999 declare or pay any dividend on any shares
of GSP Stock payable in shares of GSP Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of GSP Stock (by
reclassification or otherwise than by payment of a dividend in shares of GSP
Stock) into a greater or lesser number of shares of GSP Stock, then in each such
case the amount to which holders of shares of Series D Preferred Stock were
entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of GSP Stock outstanding immediately
after such event and the denominator of which is the number of shares of GSP
Stock that were outstanding immediately prior to such event.
b. The Corporation shall declare a dividend or
distribution on the Series D Preferred Stock as provided in paragraph a. of this
Section C.1 immediately after it declares a dividend or distribution on any
shares of GSP Stock (other than a dividend payable in shares of GSP Stock),
provided that, in the event no dividend or distribution shall have been declared
on the GSP Stock during the period between any Quarterly Dividend Payment Date
and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Series D Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
c. Dividends shall begin to accrue and be cumulative
on outstanding shares of Series D Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares, unless the date of
issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series D Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series D Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series D Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the date
fixed for the payment thereof.
2. Voting Rights. The holders of shares of Series D Preferred
Stock shall have the following voting rights:
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<PAGE> 47
a. Subject to the provision for adjustment
hereinafter set forth, each share of Series D Preferred Stock shall entitle the
holder thereof to 100 times the number of votes to which the holder of each
outstanding share of GSP Stock is then entitled on all matters submitted to a
vote of the stockholders of the Corporation. In the event the Corporation shall
at any time after May 26, 1999 declare or pay any dividend on any shares of GSP
Stock payable in shares of GSP Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of GSP Stock (by reclassification or
otherwise than by payment of a dividend in shares of GSP Stock) into a greater
or lesser number of shares of GSP Stock, then in each such case the number of
votes per share to which holders of shares of Series D Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares of GSP
Stock outstanding immediately after such event and the denominator of which is
the number of shares of GSP Stock that were outstanding immediately prior to
such event.
b. Except as otherwise provided herein, in the
Articles of Organization, in any other vote of the Board of Directors of the
Corporation creating a series of Preferred Stock, or by law, the holders of
shares of Series D Preferred Stock and the holders of Common Shares and any
other capital stock of the Corporation having general voting rights shall vote
together as one series on all matters submitted to a vote of stockholders of the
Corporation.
c. Except as set forth herein or as otherwise
provided by law, holders of Series D Preferred Stock shall have no voting
rights.
3. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series D
Preferred Stock unless, prior thereto, the holders of shares of Series D
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series D
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
GSP Stock, or (2) to the holders of shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up) with the Series
D Preferred Stock, except distributions made ratably on the Series D Preferred
Stock and all other such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time after
May 26, 1999 declare or pay any dividend on any shares of GSP Stock payable in
shares of GSP Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of GSP Stock (by reclassification or otherwise than by
payment of a dividend in shares of GSP Stock) into a greater or lesser number of
shares of GSP Stock, then in each such case the aggregate amount to which
holders of shares of Series D Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of GSP Stock outstanding immediately after such event and the
denominator of which is the number of shares of GSP Stock that were outstanding
immediately prior to such event.
A-11
<PAGE> 48
4. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
Common Shares are exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case each share of Series D
Preferred Stock shall at the same time be similarly exchanged or changed into an
amount per share (subject to the provision for adjustment hereinafter set forth)
equal to 100 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for which
each share of GSP Stock is changed or exchanged. In the event the Corporation
shall at any time after May 26, 1999 declare or pay any dividend on shares of
GSP Stock payable in shares of GSP Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of GSP Stock (by reclassification or
otherwise than by payment of a dividend in shares of GSP Stock) into a greater
or lesser number of shares of GSP Stock, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change of shares
of Series D Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of GSP Stock
outstanding immediately after such event and the denominator of which is the
number of shares of GSP Stock that were outstanding immediately prior to such
event.
F. General Provisions. Except as otherwise specifically provided in a
particular series of Junior Preferred Stock, the following provisions shall
apply to all series of Junior Preferred Stock:
1. Certain Restrictions.
a. Whenever quarterly dividends or other dividends or
distributions payable on the Junior Preferred Stock are in arrears, thereafter
and until all accrued and unpaid dividends and distributions, whether or not
declared, on shares of Junior Preferred Stock outstanding shall have been paid
in full, the Corporation shall not:
(1) declare or pay dividends, or make any
other distributions, on any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Junior
Preferred Stock;
(2) declare or pay dividends, or make any
other distributions, on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Junior
Preferred Stock, except dividends paid ratably on the Junior Preferred Stock and
all such parity stock on which dividends are payable or in arrears in proportion
to the total amounts to which the holders of all such shares are then entitled;
(3) redeem or purchase or otherwise acquire
for consideration shares of any stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Junior Preferred Stock,
provided that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for shares of any stock of
the Corporation ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Junior Preferred Stock; or
A-12
<PAGE> 49
(4) redeem, purchase or otherwise acquire
for consideration any shares of Junior Preferred Stock, or any shares of stock
ranking on a parity with the Junior Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable treatment among the
respective series or classes.
2. The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph a. of
this paragraph E.1. purchase or otherwise acquire such shares at such time and
in such manner.
G. Reacquired Shares. Any shares of Junior Preferred Stock purchased or
otherwise acquired by the Corporation in any manner whatsoever shall be retired
and cancelled promptly after the acquisition thereof. All such shares shall upon
their cancellation become authorized but unissued shares of Preferred Stock and
may be reissued as shares of the same series of Preferred Stock or as part of a
new series of Preferred Stock, subject to the conditions and restrictions on
issuance set forth herein, in the Articles of Organization, in any other vote of
the Board of Directors of the Corporation creating a series of Preferred Stock,
or as otherwise required by law.
H. Redemption. The shares of Junior Preferred Stock shall not be
redeemable.
I. Rank. The Series A Preferred Stock, the Series B Preferred Stock,
the Series C Preferred Stock and the Series D Preferred Stock shall rank equally
with respect to the payment of dividends and the distribution of assets together
with any other series of the Corporation's Preferred Stock that specifically
provide that they shall rank equally with Junior Preferred Stock. The Junior
Preferred Stock shall rank junior with respect to the payment of dividends and
the distribution of assets to all series of the Corporation's Preferred Stock
that specifically provide that they shall rank prior to the Junior Preferred
Stock. Nothing herein shall preclude the Board from creating any series of
Preferred Stock ranking on a parity with or prior to the Junior Preferred Stock
as to the payment of dividends or the distribution of assets.
J. Amendment. The Articles of Organization of the Corporation shall not
be amended in any manner which would materially alter or change the powers,
preferences or special rights of the holders of Junior Preferred Stock so as to
affect them adversely without the affirmative vote of the holders of at least
two-thirds of each outstanding series of Junior Preferred Stock, voting together
as a single series, provided that, any two or more series of Junior Preferred
Stock that are adversely affected in the same manner shall vote together as a
single class.
K. Fractional Shares. The Junior Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of the Junior Preferred Stock.
A-13
<PAGE> 50
EXHIBIT B -- FORM OF RIGHT CERTIFICATE
Certificate No [GGD/GTR/GMO/GSP]R- _________ Rights
NOT EXERCISABLE AFTER MARCH 28, 2009 OR EARLIER IF REDEMPTION
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.001 PER
RIGHT, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES (SPECIFIED IN SECTION 7(e) AND 11(b) OF
THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS
AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME
NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHT
CERTIFICATE WERE ISSUED TO A PERSON WHO WAS AN ACQUIRING
PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). THIS
RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME
VOID IN THE CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT,
INCLUDING SECTION 7(e) AND SECTION 11(b) THEREOF.](1)
Right Certificate
GENZYME CORPORATION
This certifies that __________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the
Amended and Restated Renewed Rights Agreement, dated as of June 10, 1999 (the
"Rights Agreement"), between Genzyme Corporation, a Massachusetts corporation
(the "Company"), and [ ] (the "Rights Agent"), to purchase from the
Company at any time after the Distribution Date (as such term is defined in the
Rights Agreement) and prior to 5:00 P.M., Massachusetts time, on March 28, 2009
at the office of the Rights Agent designated for such purposes, or at the office
of its successor as Rights Agent, one one-hundredth of a fully paid
non-assessable share of Series [A/B/C/D] Junior Participating Preferred Stock
(the "Preferred Shares") of the Company, at a purchase price of
$[300.00/26.00/150.00] per one one-hundredth of a Preferred Share (the "Purchase
Price"), upon presentation and surrender of this Right Certificate with the Form
of Election to Purchase and
- ----------
(1) The portion of the legend in brackets shall be inserted only if applicable.
B-1
<PAGE> 51
related Certificate duly executed. The number of Rights evidenced by this Right
Certificate (and the number of one one-hundredths of a Preferred Share which may
be purchased upon exercise hereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of ___________, based on the
Preferred Shares as constituted at such date.
Upon the occurrence of a Triggering Event (as such term is defined in
the Rights Agreement), if the Rights evidenced by this Right Certificate are
beneficially owned by (i) an Acquiring Person (as such terms are defined in the
Rights Agreement), (ii) a transferee of any such Acquiring Person, Associate or
Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such transfer, became an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such
rights shall become null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of any such Triggering
Event.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of Preferred Shares or other securities which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office of the Rights Agent designated for such purposes, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate number
of Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may, but are not required to, be redeemed by the Company at
a redemption price of $.001 per Right.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the
B-2
<PAGE> 52
Company which may at any time be issuable on the exercise hereof, nor shall
anything contained in the Rights Agreement or herein be construed to confer upon
the holder hereof, as such, any of the rights of a stockholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate shall have been exercised as provided in the
Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of ____________,_____.
[CORPORATE SEAL]
GENZYME CORPORATION
ATTEST
__________________________________ By:________________________________
Clerk Name:
Title:
Countersigned:
[ ]
By:_______________________________
Authorized Signature
B-3
<PAGE> 53
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ________________________ hereby sells, assigns and
transfers unto ___________________________________________________________
(Please print name and address of transferee)
__________________________________________ this Right Certificate, together with
all right, title and interest therein, and does hereby irrevocably constitute
and appoint Attorney, to transfer the within Right Certificate on the books of
the within-named Company, with full power of substitution.
Dated:________________________, ____
___________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an Eligible Guarantor
Institution, as defined in Rule 17Ad-15 under the Securities Exchange Act of
1934, as amended.
_______________________________________________________________________________
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement);
B-4
<PAGE> 54
Form of Reverse Side of Right Certificate -- continued
_______________________________________________________________________________
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated:________________________, ____ _________________________________
Signature
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
_______________________________________________________________________________
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To: GENZYME CORPORATION
The undersigned hereby irrevocably elects to exercise _______
Rights represented by this Right Certificate to purchase the Preferred Shares
issuable upon the exercise of such Rights and requests that certificates for
such Preferred Shares be issued in the name of:
Please insert social security
or other identifying number
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new
B-5
<PAGE> 55
Form of Reverse Side of Right Certificate -- continued
_______________________________________________________________________________
Right Certificate for the balance remaining of such Rights shall be registered
in the name of and delivered to:
Please insert social security
or other identifying number
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
Dated:________________________, ____
_____________________________________
Signature
(Signature must conform in all respects
to name of holder as specified on the
face of this Right Certificate in
every particular, without alteration
or enlargement or any change
whatsoever)
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
_______________________________________________________________________________
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ]
are [ ] are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any
B-6
<PAGE> 56
Form of Reverse Side of Right Certificate - continued
_______________________________________________________________________________
such Acquiring Person (as such terms are defined pursuant to the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated:________________________, ____
_____________________________________
Signature
_______________________________________________________________________________
NOTICE
The signatures in the foregoing Forms of Assignment and Election must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
In the event the Certificates set forth above in the Forms of
Assignment and Election are not completed, the Company will deem the beneficial
owner of the Rights evidenced by this Right Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Rights Agreement)
and in the case of an Assignment, will affix a legend to that effect on any
Right Certificates issued in exchange for this Right Certificate.
B-7
